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by Antony C. Sutton 

About the Author: 

Antony C. Sutton, D.Sc. 

was born in London, England in 1925, spent 
most of his life in the United States and has 
been a citizen for 40 years. 

I With an academic background in economics 
and engineering, Sutton has worked in mining 
exploration, iron and steel industries before 
graduate school at UCLA. In the 1960s he was 
Professor of Economics at California State 

I University, Los Angeles, followed by seven 
years as a Research Fellow at Stanford University. 

While at the Hoover Institution (Stanford), Sutton wrote the three volume 
definitive work on Soviet technology, Western Technology and Soviet 
Economic Development (still in print after 25 years). This was followed by 
National Suicide: Military Aid to the Soviet Union (Arlington House) which 
accused the Establishment of killing Americans in Vietnam with our own 
technology. Hoover Institution, under pressure from the White House, 
arbitrarily converted Sutton to a "non-person" by removing his Fellowship. 

Intrigued by the powerful forces behind this assault, he then researched and 
wrote another three volumes on the financial and political support given by 
Wall Street international bankers to three variants of socialism. These were 
published as Wall Street and the Bolshevik Revolution, Wall Street and the 
Rise of Hitler and Wall Street and FDR (all in the 1970s). 

After leaving Stanford, Sutton edited The Phoenix Letter, a monthly 
newsletter on the Abuse of Power (still published today) and in 1990 started 
another newsletter, Future Technology Intelligence Report, covering 
suppressed technology. 

In philosophy a strong constitutionalist, the author freely expresses his 
contempt for Washington usurpation of political power. ..but always based on 
the facts. 




























Table of Illustrations 

page 4 Los Angeles Times Cartoon by 

Ed Gamble, 1994 

Page 14 The Money Trust Honors Woodrow 


Page 30 A page from Clinton Roosevelt's 

The Science of Government 

Page 73 Stage One: The Original Plan For 

A Federal Reserve System 

Page 104 Stage Two: Woodrow Wilson in 

Debt to the Money Trust 

Page 106 Paul Volcker, Chairman of the Federal Reserve 
System in the 1970s and responsible for 
monetizing foreign fiat money. 

Page 115 Federal Reserve Board of 

San Francisco Claims 

Chapter One: 

Since 1913 politicians and media have treated the Federal 
Reserve Bank as a kind of untouchable off limits semi-God.. .no 
one except certified crackpots and kooks criticizes the Fed. 
Conventional wisdom dictates that anyone who attacks the 
Federal Reserve System is doomed and Congressional 
investigation of the Fed would result in economic chaos and a 
disastrous plunge in the stock market. 

Recently President Clinton got to appoint Alan Blinder to a 
seat on the seven-member Board of Governors. Blinder launched 
into criticism of Fed actions, i.e., interest rates are too high and 
differed from the policy laid down by Chairman Alan Greenspan. 

Poor Blinder was blindsided by the establishment press and 
no doubt received advice to keep quiet because since this initial 
speech, Blinder has repeatedly stated there are no differences 
between himself and Chairman Greenspan and refuses to go 
beyond this curious mea culpa. 

There is a vast misconception about the Fed. The President 
and the Congress have very little, if any, influence on policy. The 
Congress handed over all monetary powers to the Fed in 1913. 
The Fed is a private bank, owned by banks, and pays dividends 
on its shares owned only by banks. The Fed is a private Bankers' 

The Federal Reserve Conspiracy 

Yet Fed policy, not Government policy, is the dominant factor in 
economic growth. The Fed can create jobs by loosening credit. The 
Government talks a lot about creating jobs but in fact can only create 
bureaucracies which restrict rather than promote enterprise. The private 
sector creates productive jobs and the private sector is heavily 
dependent on Fed policy to do this. 

The Congress has never investigated the Fed and is highly 
unlikely to do so. No one sees Fed accounts; they are not audited. No 
balance sheets are issued. No one, but no one, ever criticizes the Fed 
and survives. 

Why all the secrecy and caution? Simply because the Fed has a 
legal monopoly of money granted by Congress in 1913 proceedings that 
were unconstitutional and fraudulent. Most of Congress had no idea of 
the contents of the Federal Reserve Bill signed by President Woodrow 
Wilson who was in debt to Wall Street. 

The Federal Reserve has the power to create money. This money 
is fiction, created out of nothing. This can be money in the form of 
created credit through the discount window at which other banks 
borrow at the discount rate of interest or it can be notes printed by the 
Treasury and sold to the Fed and paid for by Fed-created funds 

In brief, this private group of bankers has a money machine 
monopoly. This monopoly is uncontrolled by anyone and is guaranteed 
profit. Further, the monopoly doesn't have to answer questions or 
produce books or file annual statements. 

It is an unrestricted money monopoly. 

This book explains how this money monopoly came about. 
Obviously, Congress and the general public were misled and lied to 
when the Federal Reserve Bank was in discussion. Why the monopoly 
has continued is that the public is lazy, and so long as their individual 
world is reasonably fulfilling, has no reason to question Fed actions. 

The Bankers' Bank 

Even if they do they will find few books that surface the real facts. 
Academicians are too interested in protecting the Fed monopoly. An 
academic book criticizing the Fed will never find a publisher and the 
economist author would probably find tenure denied. 

This is the first book that details hour by hour the events that led 
up to passage of the Federal Reserve Act of 1913 - and the many 
decades of work and secret planning that private bankers had invested 
to obtain their money monopoly. 

The Federal Reserve Conspiracy 


ED GAMBLE, Florida Times-Uni 

Los Angeles Times Cartoon by Ed Gamble, 1994 

Chapter Two 



It is fashionable in our contemporary academic world to 
ignore the powerful arguments of the Founding Fathers: the 
arguments of Presidents Thomas Jefferson, James Madison, and 
Andrew Jackson in particular. These arguments are that the 
Republic and the Constitution are always in danger from the so- 
called "money power," a group of autocrats, an elite we would 
call them today, who have manipulated the political power of the 
state to gain a monopoly over money issue. 

Our modern academics even ignore Thomas Jefferson's chief 
reason for remaining in politics, i.e., to save the newly born 
United States from those elitists Jefferson called "monocrats" and 
"monopolists." It was the banking monopoly that Jefferson 
considered to be the greatest danger to the survival of the 

The Jeffersonian ideal, one that contemporary elitists and 
Marxists sneer at, was a Republic comprising small property 
owning citizens (Marx would later call them bourgeoisie and 
Nelson Rockefeller used to call them "peasants") with a sense of 
civic awareness and a regard for the rights of their neighbors. The 
best government for Jefferson was the least government, 
where individual 

The Federal Reserve Conspiracy 

citizens take it upon themselves to protect the rights of neighbors. 
While Jefferson rejected socialist ideas he equally rejected the 
monopoly power of banking interests and feared what elitist banking 
power would do to American liberties. Said Jefferson: 

If the American people ever allow the banks to control the 
issuance of their currency, first by inflation and then by deflation, 
the banks and corporations that will grow up around them will 
deprive the people of all property until their children will wake up 
homeless on the continent their fathers occupied. The issuing 
power of money should be taken from the banks and restored to 
Congress and the people to whom it belongs. I sincerely believe 
the banking institutions are more dangerous to liberty than 
standing armies. (1) 

The First Private Banking Monopoly 

The Founding Fathers' discussion of banks and the money power 
reflect the clash of political philosophies among early Americans with 
Alexander Hamilton on one side and Jefferson, Madison and Franklin 
on the Jeffersonian side. Hamilton represented the autocratic tradition 
prominent in Europe that figured on winning through a banking 
monopoly what could not be won politically. It was Hamilton who 
introduced a bill in December, 1790 into the House of Representatives 
to grant a charter for the privately owned Bank of the United States, 
thus creating the first private money monopoly in the U.S., a 
predecessor to the privately owned Federal Reserve System. And it was 
Alexander Hamilton who just a few years before wrote the charter for 
the Bank of New York, the first bank in New York City. Isaac 
Roosevelt, great-great-grandfather 

Thomas Jefferson and the Money Power 

of Franklin Delano Roosevelt, was its second president, from 1796- 

The Hamiltonian proposal for a national bank was a charter for 
private monopoly, a Congressional grant for a privileged few. The 
Bank of the U.S. had the sole right to issue currency, it was exempt 
from taxation, and the U.S. government was ultimately responsible for 
its actions and debts. As described by George Bancroft: 

Hamilton recommended a National Bank with a capital of 
ten or fifteen million dollars, to be paid one-third in hard money 
and the other two-thirds in European funds or landed security. It 
was to be erected into a legal corporation for thirty years, during 
which no other bank, public or private, was to be permitted. Its 
capital and deposits were to be exempt from taxation, and the 
United States, collectively and particularly, were to become 
conjointly responsible for all its transactions. Its sources of profit 
were to be the sole right of issuing a currency for the United 
States equal in amount to the whole capital stock of the bank. (2) 

Public reaction to Congressional grant of a private banking 
monopoly for a group of private citizens was caustic. Declared James 

In case of a universal circulation of the notes of the proposed 
bank, the profits will be so great that the government ought to 
receive a very considerable sum for granting the charter. 

There are other defects. ..and the right to establish 
subordinate banks ought not to be delegated to any set of men 
under Heaven. (3) 

In the Senate, William McClay made a strong denunciation: 

The Federal Reserve Conspiracy 

Jan. 17 (1790) Monday. I told them plainly that I was no 
advocate of the banking system; that I considered them machines 
for promoting the profits of unproductive Men;. ..that the whole 
profit of the bank ought to belong to the public, provided it was 
possible to advance the whole stock on her account. 

But I must remark that the public was grossly imposed upon 
in the present instances. While she (Ed: the public,) advanced all 
specie; individuals (Ed: the bank organizers) advanced three- 
fourths in certificates, which were of no more value in the support 
of the bank than so much stubble. Besides, the certificates were all 
under interest already, and it was highly unjust that other paper 
(money) should be issued on their credit which bore a premium 
and operated as a further tax on the country. (4) 

Hamilton's proposal was referred to a Senate Committee. But this 
Committee included Philip Schyler (Hamilton's father-in-law) and all 
its members shared Hamilton's political views. In brief, the Committee 
was stacked. 

President Washington then referred the bill to Thomas Jefferson 
(Secretary of State) and Edmund Randolph (Attorney General). Both 
found it to be unconstitutional. Jefferson's opinion on the 
unconstitutionality of the bank included the following powerful 

I consider the foundation of the Constitution as laid on this 
ground; That "all powers not delegated to the United States by the 
Constitution nor prohibited by it to the states, are reserved to the 
states, or to the people. " 

Thomas Jefferson and the Money Power 

To take a single step beyond the boundaries thus specifically 
drawn around the powers of Congress is to take possession of a 
boundless field of power no longer susceptible of any definition. 

The Bill delivers us up bound to the National Bank, who are 
free to refuse all arrangements, but on their own terms, and the 
public not free, on such refusal, to employ any other bank. (5) 

The Bank of New York 

This was not Alexander Hamilton's first proposal for a self- 
interested bank charter: five years earlier, in 1784, Hamilton joined 
with Isaac Roosevelt and others to create the Bank of New York. 

It is remarkable that academics have not emphasized the 
association of the Roosevelt family with the Bank of New York, the 
first bank founded in New York City and New York State and also one 
of the very first banks founded in the United States. Only the Bank of 
North America and the Pennsylvania Bank organized during the 
Revolutionary War preceded the Bank of New York. 

The initial meeting of the Bank of New York was held March 15, 
1784 and the following directors were present: (6) 

Alexander McDougal (President) Wlliam Maxwell 
Samuel Franklin Nicholas Low 

Robert Bowne Daniel McCormick 

Comfort Sands Isaac Roosevelt 

Alexander Hamilton John Vanderbilt 

Joshua Waddington Thomas Randall 

Thomas B. Stoughton 

Alexander Hamilton, who as we have seen, staunchly opposed 
Thomas Jefferson and the Jeff ersonian democratic tradition in American 
politics, was connected with the Bank of New York from the start. The 
constitution of the Bank of 

The Federal Reserve Conspiracy, 

New York was in fact written by Alexander Hamilton. And as 
most of the newly elected officers of the bank were not familiar 
with banking business it was Alexander Hamilton who provided a 
letter of introduction to the Bank of North America which 
supplied the necessary information and guidance. 

The first president of the Bank of New York was Jeremiah 
Wadsworth. His tenure was brief and in May, 1786 Isaac 
Roosevelt was elected president, with William Maxwell as vice 
president. The bank offices were in the old Walton House with 
the Roosevelt sugar refinery just across the street at number 159 
Quinn Street. 

Conflict of interest is more than obvious on the part of 
Alexander Hamilton, who became Secretary of the Treasury when 
the Constitution of the United States went into effect in 1789. 
While Hamilton did not take a daily active part as director of the 
Bank of New York, Hamilton advised its cashier William Seaton, 
and in 1790 the bank of New York was made an agent of the 
United States government for the sale of 200,000 guilders. 
Simultaneously Hamilton laid before Congress the idea of the 
Bank of the United States -a private banking monopoly. 

Furthermore Hamilton used his cabinet influence to prevent 
the Bank of the United States from establishing a branch in the 
City of New York, in competition with the Bank of New York. 

It also appears that Hamilton tried to make the Bank of New 
York the exclusive agent of the United States government in New 
York. In January, 1791 Alexander Hamilton wrote to William 
Seaton as follows: 

I shall labor to give what has taken place a turn 
favorable to another union the propriety of which is to say 
clearly illustrated by the present state of things. It is my wish 
that the Bank of New 


Thomas Jefferson and the Money Power 

York may by all means continue to receive deposits from the 
collection in the paper of the Bank of the United States and 
that they may also receive payment for the Dutch bills in the 
same paper. (7) 

Later in the same letter, Hamilton writes as follows: 

Be confidential with me if you are pressed whatever 
support may be in my power shall be afforded. I consider the 
public interest as materially involved in aiding a valuable 
institution like yours to withstand the attacks of a 
confederated host of frantic and I fear in too many instances 
unprincipled gamblers. 

Alexander Hamilton was also overly protective when in 
1791 a rival bank was proposed for New York City. When 
Hamilton heard of the project he expressed strong disapproval in 
a letter to William Seaton dated January 18, 1791: 

I have learned with infinite pain the circumstance of a 
new bank having started up in your city. Its effects cannot 
but be in every way pernicious. I sincerely hope that the 
Bank of New York will listen to no coalition with this newly 
engendered monster, a better alliance I am strongly 
persuaded will be brought about for it and the joint force of 
two solid institutions will without effort or violence remove 
the excrescence just appeared. I express myself in these 
strong terms to you confidentially not that I have any 
objection to my opinion in being known as to the natural 
tendency of the thing. (8) 

According to Myers' History of the Great American 
Fortunes^ the Bank of New York "injected itself virulently into 
politics and fought the spread of democratic ideas with sordid but 
effective weapons." It is Myers' contention that the bank and its 
founders in the Hamiltonian tradition fully 


The Federal Reserve Conspiracy 

understood the danger to their financial interests in the Jeffersonian 

Even in 1930 the Bank of New York contained a representative of 
the Roosevelt interests - W. Emlen Roosevelt was on the 1930 board as 
was Cleveland Dodge, the backer of Woodrow Wilson for president 
(see below), and Allen Wardwell, the J. P. Morgan partner influential in 
the Bolshevik Revolution of 1917. (10) 

The Second Bank of the United States 

On March 4, 1809 James Madison, a quiet, unassuming man, 
entered the office of President. In 1776 Madison was a member of the 
Virginia Convention and served on the committee which framed the 
Constitution and the Bill of Rights. In 1787 Madison became a member 
of the Virginia delegation to the Philadelphia Convention and made 
specific constitutional suggestions, assembled in the so-called 'Virginia 
Plan." In many ways Madison can be termed the "master builder of the 
Constitution." Consequently Madison's views on the constitutionality of 
private banking monopolies are fundamental. The charter of the First 
Bank expired in 1811 and Congress refused to grant a new charter on 
the grounds of unconstitutionality. President Madison's message 
repeated the argument on the unconstitutionality of the bank and made 
the following comment: 

On the whole it is considered that the proposed 
establishments will: 

1. enjoy a monopoly of the profits of a National Bank for 
a period of twenty years; 

2. that the monopolized profits will be continually 
growing with the progress of the national population and wealth; 

3. and that the nation will, during the same period, be 
dependent on the notes of the bank for the 


Thomas Jefferson and the Money Power 

species of circulating medium whenever the precious 
metals may be wanted; and 

4. at all times (will the nation be dependent on the notes 
of the bank) for so much thereof as may be an eligible substitute 
for a specie medium; and 

5. that the extensive employment of the notes (bank) in the 
collection of the augmented taxes will, moreover, enable the banks 
greatly to extend its profitable issues of them (bank notes) without 
the expense of specie capital to support their circulation; 

It is as reasonable as it is requisite that the government, in 
return for these extraordinary concessions to the bank, should 
have a greater security for attaining the public objects of the 
institution than is presented in this Bill.... (11) 

The War of 1812 presented bank supporters with a new argument - 
financial distress brought about by the war required financial relief in 
the form of a new national bank. 

Under these pressing circumstances the House and Senate passed a 
bill creating the Second Bank of the United States. James Madison 
signed the bill into law April 10, 1816. 


The Federal Reserve Conspiracy 

The Money Trust Honors Woodrow Wilson 

Federal Reserve Notes have a curious matchup of denominations with 
Presidents. The highest value Federal Reserve Note of $100,000 bears the 
portrait of Woodrow Wilson, a real friend of the money trust. The next highest 
value of $10,000 bears the portrait of Samuel Chase, Lincoln's Treasury 
Secretary who pushed through the National Bank bill for the money interest. 

Ben Franklin gets the $100 bill and Abe Lincoln the $5.00 bill. The only 
note in the 1934 Series that bears the inscription "payable in gold" is the 
$100,000 note which is only used for transfers between the various Federal 
Reserve regional banks. 


Thomas Jefferson and the Money Power 

Endnotes to Chapter Two 

(1) The Writings of Jefferson, vol. 7 (Autobiography, Correspondence, 
Reports, Messages, Addresses and other Writings) (Committee of 
Congress: Washington, D.C., 1861) p. 685. 

(2) The History of the Constitution of the United States, (D. Appleton 
& Co., New York, 1893) p. 31. 

(3) Gaillard Hunt, Writings of James Madison, (Geo. P. Putnam's 
Sons, New York) vol. 6, p. 371. 

(4) Journal ofWm. McClay, United States Senator from Pennsylvania, 
1789. Edited by Edgar S. McClay, (D. Appleton & Co., New 
York, 1890) p. 371. 

(5) The Writings of Jefferson, vol. 7, Joint Committee of Congress, op 

(6) Henry W. Dommett, Bank of New York 1784-1884, (Putnam's 
Sons, New York, 1884) p. 9. 

(7) H. W. Dommett, op. cit, p. 41. 

(8) Ibid., p. 43. 

(9) Ibid., p. 125. 

(10) Antony Sutton, Wall Street and the Bolshevik Revolution, (New 
York, Arlington House, 1974). 

(11) Gaillard Hunt, The Life and Writings of James Madison, (New 
York, Putnam's Sons, 1908), vol. 8, p. 327. 


Chapter Three: 


The original charter for the Second Bank of the United 
States was limited in time, unlike the present Federal Reserve 
System. A new charter for the (Second) Bank of the United States 
to replace the expiring grant was passed by Congress in July 
1832, and President Andrew Jackson promptly vetoed the charter, 
with an emphatic message of major historical interest. 

According to modern academic opinion the Jackson veto is 
"legalistic, demagogic and full of sham." (1) In fact, on reading the 
message today Andrew Jackson was clearly prophetic in his 
warnings and arguments to the American people. In the first 
inaugural address in January 1832, Jackson stated his position on 
the bank and renewal of the charter: 

As the Charter of the Bank of the United States will 
expire in 1836, and its stockholders will most probably apply 
for a renewal of their privileges; in order to avoid the evils 
resulting from precipitancy in a measure involving such 
important principles and such deep pecuniary interests, I feel 
that I cannot in justice to our constituents and to the parties 
interested too soon present it to the 


The Federal Reserve Conspiracy 

deliberate consideration of the Legislature and the people. 

The constitutionality of this law has been well 
questioned.. .because it grants to those who hold stock exclusive 
privileges of a dangerous tendency. Its expediency is denied by a 
large portion of our citizens. ..and it is believed none will deny that 
it has failed in the great end of our establishing a uniform and 
sound currency throughout the United States. 1 - 2 - 1 

Andrew Jackson's personal view on the Second Bank of the 
United States is contained in a memorandum in Jackson's own 
handwriting written in January, 1832. (3) 

The opinion shows how far present constitutional interpretation 
has diverged from the intent of our founding fathers. Jackson's opening 
argument is that all "sovereign power is in the people and the states," 
and then argues that in cases, such as the power to grant corporations, 
where the power is not expressly given to the general (Federal) 
government, then "no sovereign power not expressly granted can be 
exercised, by implication." The key is "implied power." There are no 
implied powers in the Constitution. 

Jackson goes on to argue that it may be possible for "necessity" to 
give power to grant charters to banks and corporations, but this must be 
a "positive necessity not a fained one." And then only within the ten 
mile square of Washington, DC itself does Congress have such 
sovereign power. Jackson argues as follows: 

It is inconsistent with any of the powers granted that our 
government should form a corporation and become a member of it. 
The founders were too well aware of the corrupting influence of a 
great moneyed monopoly upon government to legalize such a 
corrupting monster 


Andrew Jackson: The Last Anti-Elitist President 

by any grant either expressed or implied in the Constitution. 

The extraordinary difficulty and massive political power that 
Jackson faced in fighting the "money monopoly" and its influence 
is shown in his letter to Hugh L. White, dated April 29, 1831 
(Vol. 4, page 271): 

The great principles of democracy which we have both 
at heart to see restored to the federal government cannot be 
accomplished unless by a united cabinet who labor to this 
end. The struggles against the rechartering of the United 
States Bank are to be met. The corrupting influence of the 
Bank upon the morals of the people and upon Congress are 
to be fearlessly met... 

Many who you would not have supposed have secretly 
enlisted in its ranks and between bank men nullifiers and 
internal improvement men it is hard to get a cabinet who will 
unite with me heart and hand in the great task of democratic 
reform in the administration of our government. 

By 1833 the struggle over the rechartering of the Bank of the 
United States had degenerated into a conflict between Andrew 
Jackson and his secretary of the treasury, William J. Duane and 
ultimately led to dismissal of Duane. Jackson wanted to withdraw 
all government deposits from the private Bank of the United 
States while Duane refused to order removal of the deposits. 

In a letter dated June 26, 1833 (Vol. 5, page 111) Andrew 
Jackson expands on his demand for withdrawal of government 
deposits from the Bank of the United States, and proposes that 
one bank be selected in each of various cities to receive 
government deposits. State banks with good credit would be 
preferable to the concentration of 


The Federal Reserve Conspiracy, 

government funds in one bank which was a private 

The letter was accompanied by a paper explaining Jackson's 
views on possible government relations with the Bank of the 
United States and the future. Included was this straightforward 

The framers (of our Constitution) were too well aware 
of the corrupting influences of a great moneyed monopoly 
upon government to legalize such a corrupting monster by 
any grant either express or implied in the constitution. 

Bank corporations are brokers on a large scale, and 
could it be really urged that the framers of the Constitution 
intended that our Government should become a Government 
of Brokers? If so, then the profits of the National Brokers 
Shop must enure to the benefit of the whole people, and not a 
few privileged moneyed capitalists, to the utter rejection of 
the many/" 

The opinion recalled that in December 1831 Congress 
petitioned for a renewal of the bank charter and Jackson had 
vetoed the bill. As Jackson was then a candidate for reelection 
this in effect brought the veto directly before the electorate and in 
approving the president the public also condemned the bill as both 
"inexpedient and unconstitutional." 

In other words Jackson argued that his veto had already 
received public approval. Therefore, Jackson continued, "the duty 
of the bank was to wind up its concerns in such a manner that will 
produce the least pressure upon the money market." 

Jackson recalled the extraordinary and rapid increase of 
government debt to the bank which had grown by $28 


Andrew Jackson: The Last Anti-Elitist President 

million or 66 percent in a period of 16 months. Jackson commented as 

The motive of the enormous extension of loans can no longer 
be doubted. It was unquestionably to gain power in the country 
and force the government through the influence of the debtors to 
grant it a new charter. 

This must be the first and last statement from an American 
President declaring what many now suspect: that certain banks (but not 
all bankers) use debt as a political weapon for control. We cannot 
include all bankers because bankers in Catholic countries, for example, 
are forbidden on grounds of religion from using debt for control. This 
would amount to usury. 

Jackson goes on to outline the reasons for his wish to sever 
connections between the bank and the government: 

a leading objection is that the Bank of the United States has 
the power and in that event will have the disposition to crush the 
state banks particularly those which may be selected by the 
government as the depositories of its funds and thus cause wide 
spread distress and ruin throughout the United States. 

Then Jackson makes an argument strange to the ears of those 
reading in the 20th century: 

The only currency known to the Constitution of the United 
States is gold and silver. This is consequently the only currency 
which that instrument delegates to Congress the power to 

This suggests that Andrew Jackson would have considered the 
present Federal Reserve System, a private 


The Federal Reserve Conspiracy 

bank-owned monopoly, to be unconstitutional and in fact "the money 
monster" in new form. 

President Andrew Jackson's final message on March 4, 1837 was 
unbelievably prophetic in its content - and the last time an American 
President was sufficiently independent of the elitist powers behind the 
scenes to publicly warn American citizens of the dangers to their 
freedoms and livelihood. Here is an extract from Jackson's final 
message to the American people: 

The distress and alarm which pervaded and agitated the 
whole country when the Bank of the United States waged war 
upon the people in order to compel them to submit to its demands 
cannot yet be forgotten. The ruthless and unsparing temper with 
which whole cities and communities were oppressed, individuals 
impoverished and ruined, and a scene of cheerful prosperity 
suddenly changed into one of gloom and despondency ought to be 
indelibly impressed on the memory of the people of the United 

If such was its power in a time of peace, what would it not 
have been in a season of war, with an enemy at your doors? No 
nation but the free men of the United States could have come out 
victorious from such a contest; yet, if you had not conquered, the 
government would have passed from the hands of the many to the 
few, and this organized money power, from its secret conclave, 
would have dictated the choice of your highest officials and 
compelled you to make peace or war, as best suited their own 
wishes.'- 6 -' 
Even while Jackson wrote this message to the American people 

our government had passed "from the hands of the many to the hands of 

the few." Moreover, the few "from its 


Andrew Jackson: The Last Anti-Elitist President 

secret enclave" was already dictating political choices, boom and slump 
and war and peace. 

In the United States the Jacksonian Democrats, the Whig tradition 
in American politics, were the last remnant that knew and understood 
the power behind the scenes. Across the Atlantic in England the 
Cobdenites under Richard Cobden and John Bright tried to maintain a 
similar torch of individual freedom. They also failed. 

As Jackson wrote his last message, socialist manifestos were being 
weighed and put to paper. Not to improve the lot of the common man as 
they would have us believe, but as devices to gain political power for 
the elite. 


The Federal Reserve Conspiracy 

Endnotes to Chapter Three 

(1) Bray Hammond, Banks and Politics in America, (Princeton 
University Press, Princeton, 1957) p. 405. It is noteworthy that 
Princeton, one of the Ivy League schools, is a scholastic base of 
the "establishment" and helps perpetuate this onesided historical 

(2) James A. Hamilton, Reminiscences, p. 149. 

(3) John Spencer Bassett, ed., Correspondence of Andrew Jackson, 
(Carnegie Institution, Washington, D.C., 1929-32) vol. 4, p. 389. 

(4) Ibid., p. 271. Jackson was not a skilled writer. He was a man of 
action and principle rather than a man of letters. However, his 
points are clearly there for those with eyes to read. 

(5) Ibid., p. 92. 

(6) Richardson's Messages, Vol. 4, p. 1523. 


Chapter Four: 

The forces of "the few," i.e., the establishment elite, have 
been in the ascendancy since Jackson's last message of 1837. 
President Martin Van Buren tried briefly and failed to stem their 
power. Abraham Lincoln tried, and also failed. Every president 
since Lincoln has neglected even to try to curb the power of the 

On the one hand is the "money monopoly" controlling the 
status quo and the ruling establishments. On the other hand is the 
"revolution of rising expectations" superficially created by 
socialist revolutionaries, but in fact socialism in theory and 
practice is created, supported and controlled with debt and 
political power created by the "money monopoly." 

In this chapter we will look at an American socialist 
manifesto, the forerunner of FDR's New Deal, written by Clinton 
Roosevelt in 1841. Clinton Roosevelt, one of the lesser known 
Roosevelt cousins was descended from the New York banking 
Roosevelts and linked by his socialist writings to the 20th century 
Roosevelts. Then in Chapter Five we will describe a more well 
known manifesto, that of Karl Marx, also financed from the 
United States. 


The Federal Reserve Conspiracy 

The "money monopoly" creates and nurtures socialism. Let's start 
to probe this idea with the Roosevelts, who have been both bankers and 
socialists simultaneously. 

While one branch of the Roosevelt family developed the Bank of 
New York and the sugar refining industry, another branch of the family 
worked its way into practical politics and even theoretical political 

For example, long before Franklin Delano Roosevelt became 
President, James J. Roosevelt was a member of the New York State 
Legislature in 1835, 1839, and 1840, a member of the Loco Focos and 
distinguished himself by opposition to Whig attempts to eliminate 
"ballot stuffing. " (1) 

Roosevelt was not only powerful within Tammany Hall's inner 
circle but according to one biographer, "he was in effect liaison officer 
between the Hall and Wall Street, one who carried orders from the 
bankers to the politicians and dictated nominations and elections in a 
ruthless manner. " (2) 

James Roosevelt was the 1840s link between the inner circles of 
Tammany Hall and Wall Street banking including the Roosevelts' own 
Bank of New York. But it was Clinton Roosevelt, born in 1804, son of 
Elbert Cornelius Roosevelt, who provided a socialist manifesto some 
years before Marx plagiarized his more famous Communist Manifesto 
from French Socialist Victor Considerant (see Chapter Five). 

Clinton Roosevelt was a 19th-century cousin to Franklin Delano 
Roosevelt, and incidentally also related to President Theodore 
Roosevelt, John Quincy Adams, and President Martin Van Buren. 
Clinton Roosevelt's only literary effort is contained in a rare booklet 
dated 1841. (3) In essence it is a Socratic discussion between the author 
Roosevelt (i.e., the few) and a "Producer" presumably representing the 
rest of us (i.e., the many). 

Roosevelt proposes a totalitarian government much like Karl 
Marx's, where all individuality is submerged to a collective run by an 
elitist aristocratic group (i.e., the few, or 


Roosevelt's Socialist Manifesto 

the vanguard in Marxist terms) who design and enact all legislation. 
Roosevelt demanded abandonment of the Constitution to achieve his 

P. (Producer): But I ask again: Would you at once abandon 
the old doctrines of the Constitution ? 

A. (Author): Not by any means. Not any more than if one 
were in a leaky vessel he should spring overboard to save himself 
from drowning. It is a ship put hastily together when we left the 
British flag, and it was then thought an experiment of very 
doubtful issue. (4) 

The Rooseveltian system depended "First, on the art and science of 
cooperation. This is to bring the whole to bear for our mutual 
advantage." It is this cooperation, i.e., the ability to bring the whole to 
bear for the interest of the few, that is the encompassing theme of 
writings and preachings from Marx to the present Trilateral 
Commission. In the Roosevelt schema each man rises through fixed and 
specified grades in the social system and is appointed to a class of work 
to which he is best suited. Choice of occupation is strictly limited. In the 
words of Clinton Roosevelt: 

Whose duty will it be to make appointments to each class? 

A. The Grand Marshal's. 

P. Who will be accountable that the men appointed are the 
best qualified? 

A. A Court of physiologists, Moral Philosophers, and 
Farmers and Mechanics, to be chosen by the Grand Marshal and 
accountable to him. 

P. Would you constrain a citizen to submit to their decisions 
in the selection of a calling? 


The Federal Reserve Conspiracy 

A. No. If any one of good character insisted, he might try 
until he found the occupation most congenial to his tastes and 
feelings. (5) 

Then Roosevelt invented the Marshal of Creation, whose job it is 
to balance production and consumption, much like a master planner: 

P. What is the duty of the Marshal of the Creating or 
Producing order? 

A. It is to estimate the amount of produce and manufactures 
necessary to produce a sufficiency in each department below him. 
When in operation, he shall report excesses and deficiencies to the 
Grand Marshal. 

P. How shall he discover such excesses and deficiencies ? 

A. The various merchants will report to him the demand and 
supplies in every line of business, as will be seen hereafter. 

P. Under this order are agriculture, manufactures and 
commerce, as I perceive. What then is the duty of the Marshal of 

A. He should have under him four regions, or if not, foreign 
commerce must make good the deficiency. 

P. What four regions? 

A. The temperate, the warm, the hot region and the water 

P. Why divide them thus ? 


Roosevelt's Socialist Manifesto 

A. Because the products of these different regions require 
different systems of cultivation, and are properly subject to 
different minds. (6) 

Seventy-five years later, in 1915, Bernard Baruch was invited by 
President Woodrow Wilson to design a plan for a defense mobilization 
committee. This Baruch plan subsequently became the War Industries 
Board, which absorbed and replaced the old General Munitions Board. 
The War Industries Board as a concept was similar to cooperative trade 
associations, a device long desired by Wall Street to control the 
unwanted rigors of competition in the marketplace, and much like 
Clinton Roosevelt's 1841 Plan. Committees of industry, big business 
and small business, both represented in Washington, and both with 
Washington representation back home ... this was to be the backbone of 
the whole structure. 

By March, 1918, President Wilson, acting without Congressional 
authority, had endowed Baruch with more power than any other 
individual had been granted in the history of the United States. The War 
Industries Board, with Baruch as its chairman, became responsible for 
building all factories and for the supply of all raw material, all products, 
and all transportation, and all its final decisions rested with chairman 

The War Industries Board was the organizational forerunner of the 
1933 National Recovery Administration and some of the 1918 WIB 
corporate elite appointed by Baruch - Hugh Johnson, for example - 
found administrative niches in Roosevelt's NRA Plan. Comparison of 
Roosevelt's New Deal, actually written by Gerard Swope of General 
Electric, with Clinton Roosevelt's early 1841 scheme shows a 
remarkable similarity. 


The Federal Reserve Conspiracy 

Clinton Roosevelt - The Science of Government 

(New York 1841) 

This is a proposal for a totalitarian government without individual 
rights run by an elitist establishment. Clinton Roosevelt was a cousin of 
Franklin Delano Roosevelt. The book has been removed from the 
current Library of Congress catalog although it was listed in the earlier 
1959 edition. 









121 Fulton Strut. 


InKnd « to Act of Concriu. In th« T—r IHil, if 


In th« Cl«rk"l Office of Uw Dlttrtct Court for th« Southern 

District of N«r York. 


Roosevelt's Socialist Manifesto 

Endnotes to Chapter Four 

(1) Karl Schriftgiesser, The Amazing Roosevelt Family, 1613-1942 

(New York: Wilfred Funk, 1942) p. 143. 

(2) Ibid., p. 142. Examination of the charts on pages xi and xii of 

Schriftgiesser show that Franklin Delano Roosevelt, the so-called 
anti-bank candidate in 1932, also descends in direct line from New 
York Bank founder Isaac Roosevelt. 

(3) Clinton Roosevelt, The Science of Government Founded on 
Natural Law (New York: Dean & Trevett, 1841). There are 
two known copies of this book: one in the Library of Congress, 
Washington D.C. and another in the Harvard University 
Library. The existence of the book is censored (i.e., omitted) in 
the latest edition of the Library of Congress catalog, but was 
recorded in the earlier 1959 edition (page 75). A facsimile 
edition was published by Emanuel J. Josephson, as part of his 
Roosevelt's Communist Manifesto (New York: Chedney Press, 

(4) Ibid. 

(5) Ibid. 

(6) Ibid. 


Chapter Five: 

The modern welfare state such as we have in the United 
States has a remarkable resemblance to the Communist Manifesto 
supposedly written by Karl Marx in 1848. The ten points of the 
Marxian Manifesto, a program designed to overthrow the middle 
class bourgeoisie (not the big capitalists) have been implemented 
by successive Democrat and Republican governments since 
Woodrow Wilson under guidance of a self-perpetuating 

Marx's big enemy was the middle class, the bourgeoisie. 
Marx wanted to seize property from this middle class in a 
revolution led by the so-called working class, or the proletariat. 
Unfortunately for Marx the working class has never had too much 
liking for communist revolution, as we saw in the Revolutions of 
the 1980s. In practice, communist revolution is led by a handful 
of communists. How can a revolution be made and kept in power 
by a small group? Only because communists have always had 
help from the so-called ruling class - capitalists and bankers. This 
aid and assistance has been consistent from financing Marx's 
Manifesto in 1848 down to the late 20th century when a David 
Rockefeller-dominated Administration is helping Communist 
revolution and revolutionaries in Central America, Angola and 


The Federal Reserve Conspiracy 

Let's start with the 1848 Manifesto. Marx wanted to seize middle 
class property. In the Manifesto, Marx phrased the objective like this: 

In the first instance, of course, this can only be effected by 
despotic interference with bourgeois methods of production; that 
is to say by measures which seem economically inadequate and 
untenable, but have far-reaching effects, and are necessary as 
means for revolutionizing the whole system of production. (1) 

To bring about this "despotic" seizure of middle class property, 
Marx laid out a ten-point program of "measures" as follows: 

These measures will naturally differ from country to country. 
In the most advanced countries they will, generally speaking, take 
the following forms: 

1. Expropriation of landed property, and the 
use of landrents to defray State expenditure. 

2. A vigorously graduated income tax. 

3. Abolition of the right of inheritance. 

4. Confiscation of the property of all emigres and rebels. 

5. Centralisation of credit in the hands of the State, by means 
of a national bank with State capital and an exclusive monopoly. 

6. Centralisation of the means of transport in the hands of 
the State. 

7. Increase of national factories and means of production, 
cultivation of uncultivated land, and 


Karl Marx and His Manifesto 

improvement of cultivated land in accordance with a general plan. 

8. Universal and equal obligation to work; organisation of 
industrial armies, especially for agriculture. 

9. Agriculture and urban industry to work hand-in-hand, in 
such a way as, by degrees, to obliterate the distinction between 
town and country. 

10. Public and free education of all children. 
Abolition of factory work for children in its present 
form. Education and material production to be 

As we shall see later, Marx's ten points for destruction of the 
middle class have almost been completed in the United States. The 16th 
Amendment, for example (the income tax) is an archaic political 
concept that goes back some 4,000 years in history to the time of the 
Pharaohs in Egypt. 

The Pharaohs and their elitist advisors had the notion that the 
entrepreneur, the businessmen, and the workers of Egypt who produced 
the wealth of that civilization somehow were not competent to manage 
that wealth. 

These elitist advisors and Pharaoh said, "Look, we're going to 
force you people to do what we know you should. Because after all, 
were omnipotent, we are standing up here looking down on all of you 
and we can decide what is best for all. Much better than each of you can 
individually decide for yourselves. We're going to force you to have a 
government retirement program, so that when you reach retirement age 
you can retire with some dignity. We're going to force you to do what 
we know you should do, because we know you won't do it if left to your 
own devices. Also, we're going to force you to have a government food 
storage program. We're going to 


The Federal Reserve Conspiracy _ 

store grain in the government granaries because we know that you are 
not competent - you are not capable of storing food by yourselves. 

"Furthermore, we know you can't take care of your health so we're 
going to force you to have a government medical program. We know 
health is important and we know that you don't have the responsibility 
or capability for looking after yourselves. We're going to force it on you 
for your own best interests. 

"The method used to accomplish these objectives was to withhold 
a fifth part of the production of Egypt. If you go back and read the Old 
Testament it says, "That the Pharaoh had decided to take up a fifth 
power of the production of Egypt and to store it in granaries for the 
benefit of all." 

The modern day proponent of the Pharaoh's philosophy is none 
other than Karl Marx and the Communist Manifesto. The Manifesto has 
become the most significant economic document of the 20th Century. 
The significance lies in the unfortunate fact that the Manifesto is the 
economic guiding light of our leadership today, of the executive branch 
of our government and in most cases the leadership of both parties in 
this country who work to support and bring about the measures of the 

Basically what the Manifesto states is that when you have 
implemented these 10 programs in any free enterprise system, 
"capitalism" will have been destroyed and a communist state 
established in its place. This is what Marx wrote: 

Strictly speaking, political power is the organized use of 
force by one class in order to keep another class in subjection. 
When the proletariat, in the course of its fight against the 
bourgeoisie, necessarily consolidates itself into a class, by means 


Karl Marx and His Manifesto 

of a revolution makes itself the ruling class, it forcibly sweeps 
away the old system of production. 

Item 2 of Marx's Manifesto reads as follows: A heavy, 
progressive, or graduating income tax" 

This became the 16th Amendment of the United States 
Constitution, the law of the land in our country since 1913. 

Later on in 1913 we saw the passage of the Federal Reserve Act. 
Interestingly enough the idea for that program is in Karl Marx's 
program in the Communist Manifesto as Item 5 and is possibly the most 
important point in the Communist Manifesto. Item 5 reads as follows: 
Centralization of Credit in the hands of the state by means of a 
National Bank with state capital and exclusive monopoly. 

In other words Marx proposed a scheme exactly like the First 
Bank of the United States and the Federal Reserve Act with 
establishment of a fractional reserve central banking system on the 
model of the earlier European central banks. 

Karl Marx as a Plagiarist 

Marx was a brilliant fellow. He was no fool. Marx knew that if he 
could place under the control of a small group of men the ability to 
control the supply of money and credit of any nation, he could boom or 
bust those economies almost at will. By having foreknowledge of 
economic and monetary policies, billions of dollars of wealth could be 
transferred from one group to another, from the suffering middle class 
to the ruling elite. To do this required propaganda and in the mid- 19th 
century the pamphlet was an effective means of propagandizing. 

A most interesting feature of the brief Manifesto has been almost 
universally ignored by academics, i.e., that the Manifesto doesn't favor 
the working class at all and it certainly doesn't favor the middle class 
which is targeted for elimination. 


The Federal Reserve Conspiracy 

The Manifesto is a blueprint for elitist control. The Manifesto 
favors takeover of political and economic power by an elite. And when 
we look at the source of the assistance given to Marx, it is clear that the 
benefits to the elite were obvious even in the 1840s. 

Marx was certainly paid to write the Manifesto, as we shall see 
later. Furthermore, the Manifesto was plagiarized from an obscure 
French socialist named Victor Considerant, and his work, Principes du 
Socialisme: Manifeste de la Democratie au Dix Neuvieme Siecle, 
published in 1843. The second edition of Considerant's work was 
published in Paris in 1847, a year before the Manifesto and while Marx 
and Engels were living in Paris. 

The plagiarism was spotted by an even more obscure writer, W. 
Tcherkesoff, and published in precise detail in his Pages of Socialist 
History (Cooper, New York, 1902). 

Let Tcherkesoff explain Marx's plagiarism in his own words: 

I felt myself stupefied, indignant, even humiliated, when, 
about a year ago, I had occasion to read the work of Victor 
Considerant, "Principles of Socialism: Manifesto of the 
Democracy of the Nineteenth Century," written in 1843, second 
edition published in 1847. There was reason for it. In a pamphlet 
of 143 pages, Victor Considerant expounds with his habitual 
clearness all the bases of Marxism, of this "scientific" Socialism 
that the parliamentarians desire to impose upon the whole world. 
Properly speaking, the theoretical part, in which Considerant 
treats of questions of principle, does not exceed the first 50 pages; 
the remainder is consecrated to the famous prosecution that the 
government of Louis Philippe brought against the journal of 
the Fourierists, "La Democratic 


Karl Marx and His Manifesto 

pacifique, " and which the jurors of the Seine quashed. But in these 50 
short pages the famous Fourierist, like a true master, gives us so many 
profound, clear, and brilliant generalizations, that even an infinitesimal 
portion of his ideas contains in entirety all the Marxian laws and 
theories -including the famous concentration of capital and the whole of 
the "Manifesto of the Communist party. " So that the whole theoretical 
part, that is chapters one and two, which Engels himself says "are on 
the whole as correct today as ever," is simply borrowed. This 
"Manifesto," this Bible of legal revolutionary democracy, is a very 
mediocre paraphrase of numerous passages of the "Manifesto" of V. 
Considerant. Not only have Marx and Engels found the contents of their 
"Manifesto" in the "Manifesto" ofV. Considerant, but the form and the 
titles of the chapters have also been retained by the imitators. 

Paragraph two in the second chapter with V. Considerant bears 
the title: "The present Situation and '89; the Bourgeoisie and the 
Proletarians." "The Bourgeois and the Proletarians," is the title of the 
first chapter with Marx and Engels. 

V. Considerant examines different Socialist and revolutionary 
parties under the name of Democracy and his paragraphs bear the 

Stagnant Democracy; 

Retrograde Democracy; 

The Socialist Party in the Retrograde Democracy; 

The titles with Marx and Engels are: 


The Federal Reserve Conspiracy 

Reactionary Socialism 

Conservative and Bourgeois Socialism 

Critical Utopian Socialism and Communism 

Would not one think all these titles belonged to the selfsame 
work? When comparing the contents we shall see that in reality 
these two manifestos are identical.^ 

Line by line Tcherkesoff demonstrates Marx to be a common 
thief. The great Marx, the adored Marx, rates no more than a third-rate 
school boy! 

There can be no argument concerning the massive influence of 
Karl Marx and Frederick Engels on world history. Yet, by contrast, the 
secondhand nature of Marxist ideas and arguments have always been 

How about Marx's collaborator - Frederick Engels? The 
sloppiness of Engels' work has been documented in the introduction to 
Condition of the Working Class in England by W. O. Henderson and 
W. H. Chaloner (Basil Blackwell, Oxford, 1958). 

As far back as 1848 Bruno Hildebrand compiled a detailed 
criticism of Engels' book and particularly his biased interpretation of 
British government reports. Engels wanted to prove a case and distorted 
the facts to make the case. Further pointed out by Henderson and 
Chaloner, "Engels' vivid imagination was sometimes used in lieu of 
facts." For example, on page 118 of Henderson we find: 

In evidence before a Parliamentary enquiry the Nottingham 
coroner stated that one druggist had admitted using 13 cwt. of 
treacle in a year in the manufacture of Godfrey's Cordial. But in 
the 1887 edition of Engels this became "used thirteen 
hundredweight of laudanum in one year in the preparation of 
Godfrey's Cordial." 


Karl Marx and His Manifesto 

Laudanum is of course tincture of opium and far different from 
treacle. The implication is that the children of the working class were 
being drugged. 

Marx's Financial Backers 

Where did Karl Marx get his money? How did he live? On 
investigation we find that funds came mainly from four sources, and 
each of these four sources can be linked to the ruling elite in Germany 
and the United States. 

The conduit for financing the printing of the Manifesto was none 
other than Louisiana pirate Jean Laffite, who was, among his later 
occupations, a spy for Spain and a courier for a group of American 

The evidence for this twist in modern history has been ignored by 
modern historians although the documents, authenticated by Library of 
Congress and other sources, have been available for some 30 years. 

It is extraordinary that the first academics to report this source of 
financing for Marx were writing in French, not English! It was a French 
book by Georges Blond entitled Histoire de la Filibuste that contains 
the remarkable story of Karl Marx as a friend of Jean Laffite the pirate 
who "financed the printing of the Manifesto of the Communist party." 
Where did Blond get his information? It originated in two privately 
printed books published in New Orleans by Stanley Clisby Arthur, Jean 
Laffite, the Gentleman Rover and The Journal of Jean Laffite. These 
books contain original documents describing meetings between Marx 
and Laffite and the method used to finance the Manifesto. 

Now of course if you look up the name Jean Laffite in the 
Encyclopedia Britannica, you will learn that Laffite died in 1823 and 
therefore could not possibly have financed Marx in 1847 and 1848. 
Unfortunately the Britannica is wrong, as it is on many other points. 
Laffite went underground about 


The Federal Reserve Conspiracy 

1820 and lived a long and exciting life as courier for American 
bankers and businessmen. 

Laffite's courier and underground work for American bankers is 
noted in The Journal: 

We employed four men as secret officers to spy and report 
every pertinent conversation and to make verbal reports about 
any new happenings. We carried out our secret missions very 
well. We had only two ships operating under private contract with 
banking interests in Philadelphia. We decided, and took our oath, 
never to visit saloons or travel the same route twice, or ever go 
back to Louisiana, Texas or Cuba or any of the Spanish speaking 

In the same Journal under date of April 24, 1848 we find the note: 

My interviews were brief, but direct. I lived at the home of 
Mr. Louis Bertillon in Paris and sometimes hotels. I met Mr. 
Michel Chevreul, Mr. Louis Braille, Mr. Augustin Thierry, Mr. 
Alexis de Tocqueville, Mr. Karl Marx, Mr. Frederic Engels, Mr. 
Daguerre and many others. (5) 

Then Laffite goes on to the eye-opening statement: 

Nobody knew the real facts about my mission in Europe. I 
opened an account in a bank in Paris, a credit in escrow to 
finance two young men, Mr. Marx and Mr. Engels to help bring 
about the revolution of working men of the world. They are now 
working at it. (6) 

So here we have it. Jean Laffite was the agent of American 
banking interests and arranged for the financing of the Manifesto. In 
The Journal the reader will find other prominent names, i.e., Dupont, 
Peabody, Lincoln and so on. 


Karl Marx and His Manifesto 

While Jean Laffite was in Brussels he wrote at length to his artist 
friend De Franca in St. Louis, Missouri about financing Marx. Here's 
the translation of the letter dated September 29, 1847: 

I am leaving Brussels for Paris, in three or four weeks I will 
go to Amsterdam, then enroute for America. I have had a number 
of conversations with Mr. Marx and Mr. Engels, but have refused 
to participate in the conferences with the other debaters to 
compose the manifest, because I do not wish to be identified with 
the other men. 

Mr. Engels is going with me to Paris so that I may prepare a 
schedule to finance Mr. Marx and him, for a long time in advance, 
to proceed with their manuscripts, and to put in texts "Capital and 
Labor. " From the beginning it seemed to me that the two young 
men are themselves gifted and endowed, I firmly believe, with the 
highest intelligence and that they merit this is justified by the 
statistic research in the discovery on "La Categorie du Capital," 
Value, Price and Profit. 

They have penetrated a forgotten time in the exploitation of 
man by man without halt. From the Serf, of the Feudal Slave, and 
the Salaried Slave, they discover that exploitation is at the base of 
all evil. It has taken a long time to prepare "The manifests for the 
workers of the world. " A great debate took place between the two 
young men and others from Berlin, Amsterdam, Paris, and others 
from the Swiss Republic. 

I am enthused in regard to the manifests and other prospects 
for the future, as I heartily support the two young men. I hope and 
I pray that the 


The Federal Reserve Conspiracy 

projects may become joined in a strong doctrine to shake the 
foundations of the highest dynasties and leave them to be devoured 
by the lower masses. 

Mr. Marx advises and warns me not to plunge into all 
America with the manifests because there are others of the same 
kind for New York. But I hope that Jean or Harry will show the 
manifests to Mr. Joshua Speed, and he, in his turn, can show them 
to Mr. Lincoln. I know that nothing else can confuse it, as it would 
have the same chance. Its reception at Washington would be a 
sacred promise that the path that I am on is in conformity with the 
policy at present pursued in the Republic of Texas. 

Mr. Marx accepts some of my texts on the communes that I 
was forced to abandon some time ago, weighing carefully rules 
and regulations not based on a strong foundation, as so-called 
pure and simple Utopia, without preamble or body, without an 
apparent base to build on. I was in accord with the two young men 
at this date, apropos of my Utopian dreams of the past. 

The sacrifice was made to preserve the great manuscript that 
was composed and its constitution, to endure forever with the 
radiance of the stars, but not for those in power to abuse or 

Oh! to my dismay; I have agreed to the abuses practiced in 
the last part of the same year after the Dragon was eradicated and 
utterly abolished. I have described my second commune which I 
was forced to break up and abandon to the flambeau March 3, 
1821, I then took the resolution to withdraw without convert. I am 
no longer aiding those who are opposed to my principles. 


Karl Marx and His Manifesto 

I must stop. I will bring several manuscripts and the 
manifest. I hope that Jules and Glenn are progressing at school 
with Miss Wing and Miss Burgess. I know they have much 
patience as teachers. Glenn is not as strong as Jules. (6) 

The second source of American financing for Karl Marx came 
from Charles Anderson Dana, Editor of the New York Tribune owned 
by Horace Greeley. Both Dana and Greeley were fraternally associated 
with the Clinton Roosevelt we cited in Chapter Three and with his 
Roosevelt Manifesto for dictatorial government. Dana hired Marx to 
write for the New York Tribune. This Marx did, in over 500 articles 
spread over ten years from 1851 to 1861. 

Marx's prime source of German funds came from his associate 
Frederic Engels, son of a wealthy Bremen cotton manufacturer and 
subsidy provider to Marx for many years. 

More surprising is the subsidy to Marx from the Prussian elite. 
Karl Marx married Jenny von Westphalen. Jennys brother Baron 
Ferdinand von Westphalen was Minister of the Interior in Prussia 
(overseeing the police department) while Karl was under "investigation" 
by this same Prussian department. 

In other words, Marx's brother-in-law was in charge of 
investigating subversive activities. Over the years the von Westphalen 
family strongly supported Marx. For 40 years the Marx's maid, Demuth, 
was paid by the Westphalens and in fact Demuth was personally 
selected for the job by Baroness Caroline von Westphalen. Two of Karl 
Marx's early essays were actually written in the von Westphalen estate 
at Kreuznach, and money from the estate was left to Marx. 

In brief, between the American bankers and the German 
aristocracy Marx was well funded for the Manifesto and later writings. 
Why would the elite fund Marx? Simply 


The Federal Reserve Conspiracy 

because the entire Marxist philosophical battery is aimed at 
extermination of the middle class and the supremacy of the elite. 
Marxism is a device for consolidating power by the elite. It has nothing 
to do with relieving the misery of the poor or advancing mankind: it is 
an elitist political device pure and simple. 


Karl Marx and His Manifesto 

Endnotes to Chapter Five: 

(1) Ryazinsky, Communist Manifesto, (New York: Russell & Russell, 
Inc., 1963) p. 52. 

(2) Op. Cit. 

(3) W. Tcherkesoff, Pages of Socialist History, p. 56 

(4) The Journal of Jean Laffite (The Pirateer - Patriot's own story) 
(Vantage Press, New York, 1958) p. 126 

(5) Op. Cit. p. 132-33 

(6) Ibid. 

(7) From the translation in Stanley C. Arthur's Jean Laffite, 
Gentleman Rover (Harmanson, New Orleans, 1952) pp. 262 and 


Chapter Six 




Abraham Lincoln was the last of several populist presidents 
to fight against the money monopoly. Lincoln from the very 
beginning of his Administration faced a heavy burden of 
financing the Civil War with a monetary system under private 
control. During the Civil War the Union government was 
hardpressed to raise sufficient funds to pay troops, there was a 
shortage of coin and the private banking system was unwilling to 
meet the needs of the Union Army without personal gain. 

Lincoln was in the Jeffersonian-Jacksonian tradition. This 
tradition reserved the right to issue currency to the Federal 
Government and argued that this right could not lawfully be 
transferred to a private monopoly. In 1862 Lincoln presented to 
Congress a bill to make United States notes full legal tender and 
so enable the Federal Government to print sufficient paper money 
to finance the Civil War. Presumably while Lincoln did not 
envisage the inflationary potential in expanding the government's 
spending power there is little question that his financial program 
was intended as a means of paying off debts and 


The Federal Reserve Conspiracy 

government expense without allowing the private money monopoly to 
profit from the public purse. 

Unfortunately, Lincoln's Secretary of the Treasury, Samuel 
Portland Chase, was an ally of the banking interests. During the Civil 
War Chase supported Lincoln's monetary policy but later presented 
legislation to Congress favorable to the banking interests. Similarly 
Senator John Sherman, responsible for Senate passage of financial 
legislation, added even more financial power to that already granted the 
money monopoly in the form of National Bank legislation. 

Lincoln's legal tender bill was reported on February 25, 1862. 
This was to issue $150 million of legal tender United States notes. At 
that time Secretary Chase commented: 

I have a greater aversion to making anything but coin a 
legal tender in payment of debt;. is however at present 
impossible in consequence of the large expenditure entailed by the 
war to procure sufficient coin for disbursements: And it has 
therefore become indispensably necessary that we should resort 
to the issue of United States notes. (1> 

In similar manner Senator John Sherman of Ohio advocated the 
measure on the grounds, "in no other way could the payment of the 
troops and the satisfaction of other just demands be so economically or 
so well provided for." 

However this program of a national currency was opposed by the 
New York banking interests and Senator John Sherman's advocation did 
not, as we shall see later, reflect his true intent. (To be repeated in 1913 
by Senator Owen and Congressman Glass who misrepresented their 
true positions to the public on the Federal Reserve Act.) 

The idea of a national currency was opposed by banking interests, 
the money power, because it would obviously remove from bankers the 
privilege of issuing an effective 


Abraham Lincoln: Last President to Fight the Money Power 

substitute for money (defined in the Constitution as gold and silver). 
What bankers wanted the government to undertake was transfer the 
right to issue money to banking interests, i.e., to allow bankers to act as 
agents of the Federal Government. The U.S. Government would then 
be a perpetual borrower required to borrow funds at interest from a 
private money monopoly - which had obtained the monopoly power 
from the government itself. Given the restrictions of the Constitution, 
banking interests had to tread carefully. 

The Clinton Roosevelt (Bank of New York) proposal was to 
remove the Constitution, shadowed in the late 20th century by the 
Trilateral Commission pleas that the Constitution is outdated. 

Moreover the public itself, apart from Constitutional limits, would 
hardly agree to a private money monopoly if the truth were to be widely 
known. So we find from the time of Jefferson to the 1990s that any 
discussion of a private money monopoly is quickly and thoroughly 
suppressed. Nothing is more dangerous to the power of the elite than 
the public discovery and understanding of the private control of money 

What the bankers wanted in the 1860s was for the government to 
issue interest-bearing bonds. These bonds were to be used as the basis 
of bank credit. While Lincoln pushed his legal tender act the bankers 
met to draft what became the National Bank Act of 1863. 

The purpose of the National Bank Act was to give control of the 
money issue to bankers. This monopoly could be used for profit and 
with the Civil War, profits would be substantial. 

The difference between Lincoln and the money power was 
essentially whether the medium of exchange (convertible bank notes 
and inconvertible bank credit transferred by check) was to be created 
and issued by 


The Federal Reserve Conspiracy _ 

private monopoly or government monopoly. In other words, whether 
the power of government is subordinate to a banking elite or bankers 
subject to the power of government which, if Congress did its job 
honestly, also means subordinate to the power of the people. 

An extraordinary letter from Senator John Sherman to Rothschild 
Brothers in London dated June 25, 1863 (and leaked on Wall Street in 
1863) demonstrates the double dealing of even "prominent" and "well 
regarded" politicians. 

Sherman saw a chance to curry favor with the preeminent world 
bankers of the time and personally brought the possibilities of the 
proposed National Banking Act to the attention of international bankers. 

On the following pages we reproduce a letter from Rothschild 
Brothers (London) to Ikleheimer, Morton and Vandergould (Wall 
Street, New York) acknowledging receipt of a Sherman letter and 
relaying its contents. These bankers reply to Rothschild Brothers on 
July 6, 1863, with details of the National Banking Act and some 
insights into the character of Senator John Sherman. 

London, June 25, 1863; 

Messrs. Ikleheimer, Morton and Vandergould No. 3, Wall St., New 

York, U.S.A. 

Dear Sirs: 

A Mr. John Sherman has written us from a town in Ohio, 
U.S.A., as to the profit that may be made in the National Banking 
business, under a recent act of your Congress; a copy of this act 
accompanies this letter. 

Apparently this act has been drawn up on the plan 
formulated here by the British Bankers Association, and by that 
Association recommended 


Abraham Lincoln: Last President to Fight the Money Power 

to our American friends, as one that if enacted into law, would prove 
highly profitable to the banking fraternity throughout the world. 

Mr. Sherman declares that there has never been such an 
opportunity for capitalists to accumulate money as that presented by 
this act. It gives the National Bank almost complete control of the 
National finance. "The few who understand the system," he says, "will 
either be so interested in its profits, or so dependent on its favors that 
there will be no opposition from that class, while on the other hand, the 
great body of people, mentally incapable of comprehending the 
tremendous advantages that Capital derives from the system, will bear 
its burden without complaint, and perhaps without even suspecting that 
the system is inimical to their interests.... 

Your respectful servants Rothschild 

New York City 

July 6, 1863 

Messrs. Rothschild Brothers, 

London, England. 

Dear Sirs: 

We beg to acknowledge receipt of your letter of June 25, in which 
you refer to a communication received of Honorable John Sherman of 
Ohio, with reference to the advantages and profits of an American 
investment under the provisions of the National Banking Act. 

Mr. Sherman possesses in a marked degree the distinguishing 
characteristics of a successful 


The Federal Reserve Conspiracy 

financier. His temperament is such that whatever his feelings may 
be they never cause him to lose sight of the main chance. 

He is young, shrewd and ambitious. He has fixed his eyes 
upon the Presidency of the United States and is already a member 
of Congress (he has financial ambitions, too). He rightfully thinks 
that he has everything to gain by being friendly with men and 
institutions having large financial resources, and which at times 
are not too particular in their methods, either of obtaining 
government aid, or protecting themselves against unfriendly 

As to the organization of the National Bank here and the 
nature and profits of such investment we beg leave to refer to our 
printed circulars enclosed herein, vis: 

"Any number of persons not less than five may organize a 
National Banking Corporation. 

"Except in cities having 6000 inhabitants or less, a National 
Bank cannot have less than $1,000,000 capital. 

"They are private corporations organized for private gain, 
and select their own officers and employees. 

"They are not subject to control of State Laws, except as 
Congress may from time to time provide. 

"They may receive deposits and loan the same for their own 
benefit. They can buy and sell bonds and discount paper and do a 
general banking business. 


Abraham Lincoln: Last President to Fight the Money Power 

"To start a National Bank on the scale of $1,000,000 will require 
purchase of that amount (par value) of U. S. Government Bonds. 

"U. S. Government Bonds can now be purchased at 50% 
discount, so that a bank of $1,000,000 capital can be started at this 
time for only $500,000. 

"These bonds must be deposited in the U.$. Treasury at 
Washington as security for the National Bank currency, that will be 
furnished by the government to the bank. 

"The United $tates Government will pay 6% interest on the bonds 
in gold, the interest being paid semi-annually. It will be seen that at the 
present price of bonds the interest paid by the government itself is 12% 
in gold on all money invested. 

"The U.$. Government on having the bonds aforesaid deposited 
with the Treasurer, on the strength of such security will furnish 
National currency to the bank depositing the bonds, at an annual 
interest of only one per cent per annum. 

"The currency is printed by the U.$. Government in a form so like 
greenbacks, that the people do not detect the difference although the 
currency is but a promise of the bank to pay. 

"The demand for money is so great that this money can be readily 
loaned to the people across the counter of the bank at a discount at the 
rate of 10% at thirty to sixty days time, making it about 12% interest on 
the currency. 

"The interest on the bonds, plus the interest on the currency which 
the bonds secure, plus inciden- 


The Federal Reserve Conspiracy 

tals of the business, ought to make the gross earnings of the bank 
amount to from 28% to 33-1/3%. 

"National Banks are privileged to increase and contract 
their currency at will and, of course, can grant or withhold loans 
as they may see fit. As the banks have a National organization and 
can easily act together in withholding loans or extending them, it 
follows that they can by united action in refusing to make loans 
cause a stringency in the money market, and in a single week or 
even a single day cause a decline in all products of the country. 

"National Banks pay no taxes on their bonds, nor on their 
capital, nor on their deposits. " 

Requesting that you will regard this as strictly 

Most respectfully yours, 

Ikelheimer, Morton and Vandergould (3) 

It was particularly important to international bankers that they 
succeed with Lincoln. If Lincoln implemented public control of finance 
in the United States then other nations would pluck up courage to strip 
financial power from their bankers. 

European bankers, especially those in England, organized against 
Abraham Lincoln and used commercial banking channels to pressure 
bankers in the U.S. for support. The Legal Tender Bill wanted by 
Lincoln was subjected to intense lobbying in Washington and so loaded 
with amendments as to become useless. One amendment required that 
interest on bonds and notes - mere pieces of paper - was to be paid 
twice a year in gold coin. Suffocation by ridiculous amendments was 
successful. Defeat of the Legal Tender Bill was followed in 1862 by a 
bill to allow banks to issue private bank notes less than $5.00 within the 


Abraham Lincoln: Last President to Fight the Money Power 

pistrict of Columbia, a first step towards a privately controlled fiat 
money supply. 

On July 23, 1862 Lincoln vetoed the Private Bank Note Bill on 
grounds that it was the responsibility of the Federal Government to 
provide a circulating medium and that United States notes could 
equally fulfill the function of small private notes. This veto was 
Lincoln's challenge to the banking interests. 

Lincoln was a caustic critic of bankers. A delegation of New York 
bankers came to Washington to lobby in favor of the Legal Tender Bill. 
The Secretary of the Treasury introduced the delegation as follows: 

These gentlemen from New York have come to see the 
Secretary of the Treasury about our new loan. As bankers they are 
obliged to hold our national securities. I can vouch for their 
patriotism and loyalty, for, as the Good Book says, "for where the 
treasure is, there will the heart be also. " 

Lincoln replied: There is another test that I might apply, 
"Wherever the carcass is, there will the eagles be gathered together."^; 

Lincoln's national currency scheme was in direct opposition to the 
international bankers who at that time planned to extend the Bank of 
England gold standard private money to the United States. Later in the 
20th century bankers went for fiat money not backed by gold but in the 
mid- 19th century the gold-silver system offered more opportunities for 
personal gain. 

Lincoln was proposing that instead of the Federal Government 
borrowing paper or created money from the bankers that the bankers 
borrow coin or gold from the Treasury. In this way the banking interest 
would be unable to create fictional wealth from the printing press. 


The Federal Reserve Conspiracy 

The National Bank Act was presented to the United States 
as a device to raise money to run the Civil War and achieve 
financial stability. Under the Act any five persons could form a 
bank with a capital of $50,000 or more. After deposit in the 
United States Treasury of interest-bearing bonds equal to one- 
third of the paid-in capital, the Government would print National 
Bank certificates on behalf of the bank to the amount of 90 
percent of the part value of the bonds printed. 

These National Bank certificates could then be used by the 
bank to carry on banking business and receive full profit on them 
as though they were the bank's own notes. Furthermore the bank 
received from the Federal Government interest payments in gold 
coin on bonds deposited in the Treasury. 

In other words the bankers had a double profit. First, interest 
on government guaranteed money issues and second, interest paid 
on bonds in gold. The National Banking Act was a guaranteed 
profit making machine for anyone who wanted to get into 

Once again the Jeffersonian-Jacksonian tradition raised its 
voice. It claimed that the National banking system would create 
an even greater centralization of the money power than the Bank 
of the United States - which Andrew Jackson had vetoed. 

This time around the money power was much more 
organized. The National Banking Bill was in the Senate only three 
or four days and in the House only two days before it was rushed 
through at a particularly critical time in the Civil War. The Bill 
was signed into law by President Lincoln on February 25, 1863. 


Abraham Lincoln: Last President to Fight the Money Power 

Endnotes to Chapter Six 

(1) Letter from Secretary of the Treasury Chase to Elbridge, G. 
Spaulding, January 29, 1862. Quoted in American Nation History 
Series, 1861-1863 by Hosmer, vol. 20, pg. 169. 

(2) John R. Elsom, Lightning Over the Treasury Building (or an 
expose of our banking and currency monstrosity, Americas most 
reprehensible and un-American racket), (Boston: Meador 
Publishing Co., 1941), pp. 51-52. 

(3) Op. cit. pp. 53-55. 

(4) Ibid. 


Chapter Seven: 

How would you like to have the Wall Street Journal one 
week ahead of publication? 

Some people do have this privilege, not advance issues of 
Wall Street Journal; but advance knowledge of Federal Reserve 
policies... what they will be tomorrow, next week, next month and 
next year. 

From time to time the Fed makes pronouncements and 
before the pronouncement they have to decide what to pronounce. 
They get together, they discuss, they make plans and then they 
issue statements. 

The meetings are always secret, known only to the Fed 
Directors. However, if we knew what Chairman Alan Greenspan 
was going to announce on monetary and credit policies, what the 
discount rate will be, or what the prime rate will be, we could 
quickly make a fortune, because that knowledge has impact on 
Treasury bill rates, on metals markets, on the stock market and on 
real estate markets. 

The Federal Reserve system is a private system owned by 
the banks and gives only banks this advance information. 

The idea for the Fed was conceived on a small island in the 
Atlantic Ocean off Glynn County, Georgia. Back in 1910 Jekyl 
Island was a private club used by an elitist group of 


The Federal Reserve Conspiracy _ 

Wall Street financiers as a hideaway to discuss extra private business 
away from prying public ears. It was on Jekyl Island that the money 
trust designed its plan for Congressional approval of a private money 

American public opinion at the turn of the century was hostile to 
the idea of a central bank and generally opposed any further power for 
Wall Street interests. Yet a central bank along European lines offered 
vast secure profits for any financial group that could persuade Congress 
to enact central bank legislation. An elastic fiat and credit system 
offered power not possible with gold and silver as rigid disciplines on 
the financial system. 

The clandestine Jekyl Island meeting was to design a plan to bring 
a central bank to the United States disguised as a regional banking 
system.... while the bankers publicly opposed what they privately 

This dissimulation was so successful that, according to private 
secretary Joseph Tumulty, Woodrow Wilson, in signing the Federal 
Reserve Act actually believed he was removing financial power from 
Wall Street interests. 

President Wilson when governor of New Jersey in 1911 had 

The greatest monopoly in this country is the 

money monopoly. So long as that exists, our old 

variety of freedom and individual energy of 

development are out of the question. 

A great industrial nation is controlled by its system of credit. 
Our system of credit is concentrated. The growth of the nation, 
therefore, and all our activities are in the hands of a few men.... 

This is the greatest question of all: and to this statesmen 
must address themselves with earnest 


The Money Trust Creates The Fed 

determination to serve the long future and the true liberties of free 
men. (1) 

Wilson may actually have believed his own statement that the 
Federal Reserve System was "the keystone of the great arch of the 
Democratic Administration. " (2) What then is the reality behind this 
financial power known 100 years ago as the "money trust" or the 
"money power" and today as an elite group that can profit from a 
central bank? 

To answer this question we have to go back in history and look at 
the 19th century trusts and the financial tip of the trust pyramid as it 
existed in the first decade of the twentieth century. 

Between 1870 and the onset of World War One, American 
industry was concentrated under the control or influence of a handful of 
financiers, mostly in New York. John Moody, editor of the standard 
reference, Moody's Manual of Corporation Securities, recorded the 
trustification of American industry in a monumental volume of statistics 
and evidence. (3) Moody was a sympathetic observer and like Clarence 
Barron (4) another acute observer, considered trusts to be both useful and 

Criticism of the industrial trusts was widespread. John Moody's 
The Truth About Trusts with its wealth of detail demonstrated the 
pervasive money powers dominating the steel, non-ferrous metals, oil, 
tobacco, shipping, sugar and railroad industries - specifically the power 
of J. P. Morgan, the Rockefeller brothers, Edward Harriman, John 
McCormick, Henry Havemeyer and Thomas F. Ryan. 

In tracing the early history of the drive for an American central 
bank by the "money power," two historical episodes stand out: 

(1) the 1907 financial panic used by the bankers and their allies to 
urge the necessity for a central bank (although 


The Federal Reserve Conspiracy 

the panic was precipitated by Wall Street, this was not proven until 
many years later.) 

(2) the meteoric rise of German banker Paul Warburg with his 
missionary zeal to promote a carbon copy of the German Reichsbank in 
the United States. 

In 1907 there were still a few capitalists willing to challenge Wall 
Street and dispute its iron grip on financial power. Among these 
outsiders was Montana copper millionaire Frederick Augustus Heinze, 
who was selected as the key target for the 1907 panic. Heinze brought 
his copper fortune to New York and joined with C. W. Morse of the Ice 
Trust. Jointly they acquired control of Mercantile National Bank, using 
the assets of the Bank of North America already dominated by Morse. 

Heinze and Morse then acquired control of the Knickerbocker 
Trust Company, allied with the Trust Company of America and Lincoln 
Trust. They then incorporated a speculative vehicle, the United Copper 
Company. It was stock market games with United Copper that 
precipitated the 1907 crisis. Banks under control of the "money trust" 
called their loans to United Copper and began a run on the Heinze- 
Morse Mercantile National Bank. It is now generally agreed "that the 
1907 panic was precipitated by the struggle to get rid of Heinze. " (5) 

In 1913 the money trust and the 1907 panic were investigated by 
the Pujo Committee, which recorded the enormous power of the J. P. 
Morgan firm.' 6 ' 

During the years 1900 to 1920 the money trust was effectively 
controlled by the banking firm of J. P. Morgan, comprising Morgan 
himself until his death in 1913, then his son, J. P. Morgan, Jr. and the 
firm's dozen to 15 partners in association with their Rockefeller, 
Harriman and Kuhn Loeb allies. After an extended documented inquiry, 
the 1912 Pujo Committee concluded that the "money trust" was 


The Money Trust Creates The Fed 

Far more dangerous than all that has happened to us in the 
past in the way of elimination of competition in industry, is the 
control of credit through the domination of these groups over 
banks and industries. 

It is impossible that there should be competition with all the 
facilities for raising money or selling large issues of bonds in the 
hands of these few bankers and their partners and allies, who 
together dominate the financial policies of most of the existing 

The acts of this inner group, as here described, have, 
nevertheless, been more destructive of competition than anything 
accomplished by the trusts, for they strike at the very vitals of 
potential competition in every industry that is under their 
protection, a condition which if permitted to continue, will render 
impossible all attempts to restore normal competitive conditions in 
the industrial world. (7) 

In the public debate over creation of a Federal Reserve System in 
the United States, the 1907 crash was repeatedly used as the reason to 
install a central bank in the United States. The Fed was put forward as a 
way to stop financial panics. However, the 1907 panic was deliberately 
created by the "Standard Oil crowd" and the Morgan firm. 

In other words, the same group that stood to benefit from a central 
bank created the panic used to persuade the electorate that a central 
bank was vital. 

How well this private monopoly has maintained its power over the 
intervening decades since 1913 is the conclusion of a 1976 
Congressional staff report. After identifying the closed shop directors of 
the Federal Reserve 


The Federal Reserve Conspiracy 

System in the mid-1970s this Congressional investigation concludes: 

In summary the Federal Reserve directors are apparently 
representative of a small elite group which dominates much of the 
economic life of this nation. (8) 

What is important to note is that the Federal Reserve is a private 
system with private stockholders. The money trust of the 19th century 
has been granted a legal monopoly while almost all other industry is 
subject to the Sherman Antitrust Act. It is monopoly, and monopoly 
requires political power to keep in place. It is also noteworthy that 
writing on the Federal Reserve glosses over the private ownership, yet 
the very aspect of the Federal Reserve that needs to be publicly 
discussed is its private nature, who owns what and what advantages 
accrue to ownership. 

Where J. P. Morgan sat on the councils of New York City finance 
in 1907, David Rockefeller sat in the 1970s and Alan Greenspan sits 
today. Wall Street Journal in 1977 showed how these insiders used 
privileged Fed information for personal advantage. In 1907 it was J. P. 
Morgan who summoned the Treasury Secretary for an interview. In 
1980 David Rockefeller summons Henry Kissinger for a meeting. 

How did the Money Trust pull off this coup -establishment of a 
central bank under their control in a country that strongly opposed the 
idea? Justice Brandeis describes the process as follows: 

The development of our financial oligarchy, ...with which the 

history of political despotism has familiarized us - usurpation 

proceeding by gradual encroachment rather than by violent acts; 

and by "subtle and often long concealed concentration. " 

It was by processes such as these that Caesar Augustus 
became master of Rome. The makers of 


The Money Trust Creates The Fed 

our Constitution had in mind like dangers to our political liberty, 
when they provided so carefully for the separation of 
governmental powersS 10) 

The J. P. Morgan firm which dominated the Money Trust 
understood this process of "subtle" and "gradual encroachment" to 
perfection. The firm even publicly opposed the Federal Reserve bill 
which they had privately put together. 

The Morgan partners understood this process and were carefully 
chosen. In exchange for absolute loyalty they received guaranteed 
opportunities to make personal fortunes from the political and financial 
power of the monopoly. While Morgan was nominally only senior 
partner he held final and absolute powers within the firm. 

Few Morgan partners entered politics. Most partners preferred to 
work quietly behind the scenes. In the period 1900 - 1930, four partners 
were exceptions to this rule and by tracing their political moves we can 
today identify how they used duplicity to bring about objectives. 

These four partners were E. P. Davison, Dwight Whitney Morrow, 
Edward R. Stettinius and George W. Perkins. In an earlier book we 
described how the firm of Morgan manipulated the Bolshevik 
Revolution so the Morgan firm would profit whoever won in Russia. 

Morgan partner Davison was head of the Red Cross War Council 
in 1917-1919 and worked with W. Boyd Thompson, another Morgan 
ally who aided the Bolshevik side of the Revolution with funds. Dwight 
W. Morrow used his influence to get arms and diplomatic support for 
the Bolsheviks (we reprinted a Morrow memorandum on this in 
Bolshevik Revolution). Thomas Lamont used his influence in London to 
soften the British position against the Bolsheviks. 


The Federal Reserve Conspiracy_ 

Yet the Morgan firm and other partners gave help to the White 
Russians fighting the Bolsheviks and was prominent in the Siberian 

Morrow retired from his Morgan partnership in the 1920s and 
after a year as Chairman of the Aircraft Board became U.S. 
Ambassador to Mexico (1927-1930) and a United States Senator in 
1931. Stettinius supervised all war purchases for the United States in 
World War One - to the considerable advantage of Morgan-dominated 

George Perkins was a founder in 1912 and then Chairman of the 
Executive Committee of the Progressive Party - a Morgan political 
vehicle to split the Republican Party and ease Woodrow Wilson into the 
White House. David Rockefeller used the same tactic with John 
Anderson in the 1980 election. 

The device used by the Morgan firm to control American finance 
and industry was the voting trust. The handful of directors, usually three 
in a voting trust, was selected by J. P. Morgan personally. These 
directors, members of the Morgan inner group, and the voting directors 
in turn selected directors of banks and firms. 

Thus the voting trust for Guaranty Trust had two Morgan partners: 
Thomas W. Lamont and William H. Porter, plus George F. Baker, who 
was president of Morgan-controlled First National Bank. This group 
selected other outside Guaranty Trust directors, and Guaranty Trust in 
turn controlled numerous firms, lesser banks and financial institutions. 

This Morgan complex was, in 1912, able to dominate Wall Street 
banks, and so the "Money Trust." Morgan control was simplicity itself, 
based on a pyramid of power principle. Morgan partners selected 
directors of major financial institutions, and in return for the privileges 
of directorship, the loyalty of these outside directors to the Morgan 
firm was guaranteed. In turn these financial 


The Money Trust Creates The Fed 

institutions controlled industrial and railroad trusts and 
combinations. The system worked well in the late 19th century 
and the early 20th century. This is how Woodrow Wilson and 
Colonel House saw this "Money Trust": 

I think Woodrow Wilson's remark that the "money trust" 
was the most pernicious of all trusts is eminently correct. .a 
few individuals and their satellites control the leading banks 
and trust companies in America.. .they also control the 
leading corporations..} 12 ^ 

The Money Trust was legalized in 1913 as the Federal 
Reserve System, a suitably innocuous name that disguises the fact 
that it is a private central bank. 

The history of the system can be traced through three stages: 
the original plan created secretly in 1910, the promotion of 
Woodrow Wilson for President by the Money Power and then 
finally by what we can only describe as illegal passage of the 
Federal Reserve bill through the Congress. 

Representative Lindbergh from Minnesota, father of the 
world famous flier, was one of the most consistent and ardent 
critics of the Morgan group during his ten years in the House of 
Representatives. He is said to be the only man in Congress who 
read the entire 20 volumes of the Aldrich Monetary Commission. 
Such a Niagara of words poured over Congressmen raised the 
suspicion among reasonable people that those interests 
responsible for it are purposely making it impossible for 
Congressmen to digest it. Of the Aldrich Banking and Currency 
Plan, Lindbergh said: 

The Aldrich Banking and Currency Plan is a monstrous 
scheme to place under one control all the finances of the 
country, public and private. It would create one great central 
association with fifteen branches to encompass all the 
states.. ..It would admit of no membership except banks and 


The Federal Reserve Conspiracy 

companies, and exclude the smaller ones of these. The rest of the 
world would not only be excluded from holding stock, but by the 
nature of the association, powers and relations of finances to 
commerce, it would dictate the terms on which business should be 
done. With that power centered in the great city banks and these 
banks controlled by the trusts and money powers, the politics as 
well as the business of the country would be under its dictation/ 13 ^ 


The Money Trust Creates The Fed 

Endnotes to Chapter Seven: 

(1) Louis D. Brandeis, Other People's Money; and How Bankers Use 
It, (New York: Frederick A. Stokes Co.) p. 1. 

(2) Joseph P. Tumulty, Woodrow Wilson as I Knew Him (New York: 
Doubleday, 1921). 

(3) John Moody, The Trust About The Trusts (New York: Moody 
Publishing Company, 1904). 

(4) Clarence W. Barron, They Told Barron (New York: Harper & 
Brothers, 1930). 

(5) Dictionary of American Biography, Frederick Heinze. The 
Engineering and Mining Journal commented, "This was the 
beginning of the panic of 1907." 

(6) U.S. Congress, House of Representatives, Committee on Banking 
and Currency. Money Trust Investigation (Washington, D.C., 
1913) and Committee to Investigate the Concentration of Control 
of Money and Credit, Report. (62nd Congress, 3rd session. House 
Report No. 1593), known as the Pujo Committee Report. 

(7) The Story Of Our Money, p. 187. 

(8) U.S. Congress, House of Representatives, Committee on Banking, 
Currency and Housing. Federal Reserve Directors: A Study of 
Corporate and Banking Influence. August, 1976. (94th Congress, 
2nd session). Washington, U.S. Government Printing Office, 

(9) See Wall Street Journal, August 29, 1977. 


The Federal Reserve Conspiracy 

(10) The Story of Our Money, op. dr., pp. 188-89. 

(11) Antony Sutton, Wall Street and the Bolshevik Revolution (New 
Rochelle, New York: Arlington House, 1974). See particularly 
pages 89-100 and the chapter, "J. P. Morgan gives a little help to 
the other side." 

(12) Colonel E. M. House to Senator Culbertson (July 26, 1911); 
Charles Seymour, The Intimate Papers of Colonel House, (Boston 
and New York: Houghton Mifflin Co., 1926-28), I. 159. 

(15) Cited in The Story of Our Money, op. cit., p. 189. 


The Money Trust Creates The Fed 

Chart 7-1: 


Benjamin Strong 

CD. Norton 

Henry Davison' 

Frank Vanderlip 

Sen. Nelson 

Loeb /(— ^ Paul Warburg 

I Kuhn- I 


Chapter Eight: 

In 1910 six prominent Wall Street financial men met on 
Jekyl Island to map plans for a central banking system in the 
United States. The Federal Reserve System originated in a 
conspiracy. A "conspiracy" is defined legally as a secret meeting 
for an illegal purpose. The meeting was secret, it involved six 
persons and it was illegal.. .as we shall show later. 

The six conspirators were: 

Senator Nelson Aldrich, father-in-law of John D. 
Rockefeller, Jr. 

German banker Paul Warburg, of the German bankers MM 
Warburg of Hamburg and Kuhn Loeb in the United States; 

Henry P. Davison, partner in J. P. Morgan and Chairman of 
Bankers Trust Company; 

Benjamin Strong, Vice President of Bankers Trust; 

Frank Vanderlip, Chairman of National City Bank; 

Charles D. Norton, President of First National Bank. 

The last three banks were in the Morgan group; Warburg 
represented Kuhn-Loeb and Aldrich represented Rockefeller 
interests and the "Standard Oil crowd." The Harriman interest in 
Guaranty Trust had been absorbed into the Morgan group after 
the death of Harriman. 


The Federal Reserve Conspiracy 

These six dominated wealth and financial power and had 
considerable political influence. 

The secret Jekyl Island meeting was actually described in 
conspiratorial terms by one of the participants: 

Despite my views about the value to society of greater publicity 
for the affairs of corporations, there was an occasion, near the 
close of 1910, when I was as secretive, indeed as furtive, as any 
conspirator. None of us who participated felt that we were 
conspirators; on the contrary we felt we were engaged in a 
patriotic work. We were trying to plan a mechanism that would 
correct the weaknesses of our banking system as revealed under 
the strains and pressures of the panic of 1907. I do not feel it is 
any exaggeration to speak of our secret expedition to Jekyl Island 
as the occasion of the actual conception of what eventually 
became the Federal Reserve System. (1) 

After the 1907 panic plans were formulated to convince the public 
of a "need" for a central bank. The key at this point was Senator Nelson 
Aldrich, a wealthy businessman linked to the Rockefeller family 
through marriage of his daughter Abby to John D. Rockefeller Jr. 
Former Vice President Nelson Rockefeller was a direct descendent of 
this branch of the Rockefeller family. 

In the post-1907 panic era, Senator Aldrich headed a Senate 
Monetary Commission which toured Europe to discuss and study 
European central banks and especially the German Reichsbank system. 
From this junket Aldrich emerged as the Congressional expert on bank 
planning. Few spotted his close links with the banking interests. (2) 
Herbert L. Satterlee was Morgan's son-in-law and, from the inside, 
comments on Aldrich's close relations with the Money Trust 


The Jekyl Island Conspiracy 

and planning for the Federal Reserve System. Aldrich, according to 

...turned to Mr. Morgan for advice and then during the next 
two years they were to spend many hours together working out an 
orderly pattern for the banking world of this country from coast to 

Again, according to Satterlee, J. P. Morgan "lent him (Aldrich) 
Harry Davison (Morgan partner) to help with details while Paul M. 
Warburg, the Kuhn Loeb partner, also "put his service at Senator 
Aldrich's disposal. " (4) This triad -Morgan- Aldrich-Warburg - was the 
focal point for planning the introduction of central banking to the 
United States. 

The remaining Jekyl Island conspirators came on the scene later. 
Frank Vanderlip (whom we have already quoted) of National City Bank 
was linked to the Rockefeller family by marriage and came into the 
group in early 1910 after receiving a letter from Stillman, founder and 
chairman of National City Bank. This letter referred to a meeting 
between Stillman and Aldrich in Europe on the central bank question. 
From this letter we learn that the conspirators used a code and that 
Aldrich's code name was "Zivil." In his book, Vanderlip states: 

Mr. Stillman wrote me that I should make everything else 
subservient to giving my whole time 
and thought to a thorough consideration of the subject (i.e., the 
currency plan) and to draft a bill for the new Congress without a 
Wall Street tag. (5) 

Above all the conspirators knew they had to maintain 
absolute secrecy. If any Wall Street name ever became attached to a 
central banking Federal Reserve bill it would be the kiss of death. Not 
only were code names adopted but individuals went to great lengths to 
avoid public knowledge of their meetings and discussions. 


The Federal Reserve Conspiracy 

Without any question if the public in 1913 had known what we 
know today the Federal Reserve Act would have no possibility at all of 
becoming law. On the question of public suspicions of the close family 
links in the group, for which the group claimed disinterested 
impartiality, Vanderlip noted: 

But would the electorate have believed that? I question their 
ability to do so. Just to give you a faint idea: Senator Aldrich was 
the father-in-law of John D. Rockefeller, Jr., and himself a very 
rich man.Once I had written to Woodrow Wilson at Princeton, 
inviting him to speak at a dinner. Wishing to impress him with the 
importance of the occasion, I had mentioned that Senator Aldrich 
also had been invited to speak. My friend Dr. Wilson had 
astonished me by replying that he could not bring himself to speak 
on the same platform with Senator Aldrich. He did come and make 
a speech, however, after I had reported that Mr. Aldrich 's health 
would prevent him from appearing. Now then, fancy what sort of 
head-lines might have appeared over a story that Aldrich was 
conferring about new money legislation with a Morgan partner 
(Davison) and the president of the biggest bank (Vanderlip). (6) 

The National City Bank founded by Stillman is significant 
because one of its directors was Cleveland Dodge, the financial 
powerhouse and influence behind Woodrow Wilson. 

Woodrow Wilson, who was to sign the Federal Reserve Act into 
law, was a deliberate creation of the Money Power, who was approved 
in the spring of 1912 at a weekend meeting at Beechwood, the 
Vanderlip estate at Scarborough on Hudson. According to one observer, 
Wilson passed the test because Vanderlip and William Rockefeller 
discussed the 


The Jekyl Island Conspiracy 

role of American capital abroad in front of Wilson/ 7 ' This we shall 
describe in more detail later. 

The central intellectual figure in the creation of the Federal 
Reserve System was not an American but a German banker - Paul 
Moritz Warburg, a banker born in 1868 into the Hamburg Oppenheim 
family. Warburg's father was a partner in the M. M. Warburg banking 
house founded in 1798. Warburg's early career was with Samuel 
Montagu & Co. in London and the Banque Russe Pour he Commerce 
Etranger in Paris. In 1891 Warburg went to work at the family bank in 
Hamburg and became a partner in 1895. In 1902 he came to the United 
States as a partner in Kuhn Loeb, and in spite of defective English, 
began a campaign for a Federal Reserve System. The plan may be 
found in his pamphlets, "Defects and Needs of our Banking System 
since 1907" and "A plan for a modified central bank" (1907). In 1910 
Warburg proposed a plan for a United Reserve Bank and much of this 
plan was embodied in the Federal Reserve System. 

These were the men who met in secret on Jekyl Island to put 
together the initial draft of the Federal Reserve Act. 

The secret meeting was recorded by Frank Vanderlip: 

Since it would be fatal to Senator Aldrich's plan to have it 
known that he was calling on anybody from Wall Street to help him 
in preparing his report and bill, precautions were taken that would 
have delighted the heart of James Stillman. We were told to leave 
our last names behind us. ..that we should avoid dining together on 
the night of our departure to come one at a time and as unobtru- 
sively as possible to the railroad terminal on the New Jersey 
littoral of the Hudson, where Senator Aldrich's private car would 
be in readiness, attached to the rear end of a train for the South. 


The Federal Reserve Conspiracy 

When I came to that car the blinds were down and only 
slender threads of amber light showed the shape of the windows. 
Once aboard the private car we began to observe the taboo that 
had been fixed on last names. We addressed each other as "Ben, " 
"Paul, " "Nelson, " and "Abe. " Davison and I adopted even deeper 
disguises, abandoning our own first names. On the theory that we 
were always right, he became Wilbur and I became Orville, after 
those two aviation pioneers, the Wright brothers. 

The servants and the train crew may have known the 
identities of one or two of us, but they did not know all, and it was 
the names of all printed together that would have made our 
mysterious journey significant in Washington, in Wall Street, even 
in London. Discovery, we knew, simply must not happen, or else 
all our time and effort would be wasted. If it were to be exposed 
publicly that our particular group had gotten together and written 
a banking bill, that bill would have no chance whatever of 
passage by Congress.^ 

The last sentence says it all from the vantage point of an insider - 
this was a planned conspiracy. The American public would never hand 
over a monopoly of the money supply to a small group. After all, the 
Sherman Antitrust Act had just made monopoly in restraint of trade 
illegal and a money monopoly was even less acceptable. 

To avoid public knowledge, these bankers went skulking off to a 
remote island in the dead of night using code names and disguises! 

Vanderlip goes on to describe the secret meeting itself and that 
Vanderlip and Strong actually wrote the so-called Aldrich report and the 
bill presented to the Senate. What is interesting is the utter assurance on 
the part of Vanderlip 


The Jekyl Island Conspiracy 

that the bankers were acting in the interests of the country as a whole 
rather than in their own selfish interests. 

What this group proposed to do - and actually did do in 1913 - was 
replace gold and silver with a paper factory which they controlled. How 
this could be presented as a public-spirited act is probably beyond most 

We were taken by boat from the mainland to Jekyl Island and 
for a week or ten days were completely secluded, without any 
contact by telephone or telegraph with the outside. We had 
disappeared from the world onto a deserted island. There were 
plenty of colored servants but they had no idea who Ben and Paul 
and Nelson were; even Vanderlip, or Davison, or Andrew, would 
have meant less than nothing to them. 

There we worked in the club-house - We returned to the 
North as secretly as we had gone South. It was agreed that Senator 
Aldrich would present the bill we had drafted to the Senate. It 
became known to the country as the Aldrich Plan. Aldrich and 
Andrew left us at Washington,and Warburg, Davison, Strong, and I 
returned to New York. 

Congress was about to meet; but on a Saturday we got word 
in New York that Senator Aldrich was ill, too ill to write an 
appropriate document to accompany his plan. Ben Strong and I 
went on to Washington and together we prepared that report. If 
what we had done then had been made known publicly, the effort 
would have been denounced as a piece of Wall Street chicanery, 
which it certainly was not. Aldrich never was a man to be a mere 
servant of the so-called money-interests. He was a con- 


The Federal Reserve Conspiracy _ 

scientious, public -spirited man. He had called on the four of us 
who had Wall Street addresses because he knew that we had for 
years been studying aspects of the problem with which it was his 
public duty to deal. 

The Aldrich plan written by Vanderlip and Strong did not get 
through Congress. It was shot down. An ailing Senator Aldrich retired 
and the Money Trust was forced to look elsewhere to get its plans 
through Congress. 

National City Bank director Cleveland Dodge was a classmate 
(1879, Princeton) of Woodrow Wilson. McCormick of the Harvester 
Trust was in the same Princeton Class. By the early 1900s, Wilson, with 
help from Cleveland Dodge, had become President of Princeton 
University and Dodge let it be known that Wall Street considered 
Wilson "presidential material." 

A flattered Woodrow Wilson wrote journalist George Harvey in 
December, 1906 to identify "the influential men who considered him as 
presidential material." Harvey replied, "naming some of the most 
influential bankers, utility executives and conservative journalists in the 
country."' 9 ' 

Wilson, for all his public image of a teetering, owlish professor, 
had one lesson down by heart, that to get along, one has to go along. In 
March, 1907 George Harvey introduced Wilson to Thomas Fortune 
Ryan, member of the copper trust and a prominent financier. After this 
meeting, Wilson wrote a brief for the Wall Street establishment in 
which he provided academic support for the Trusts -incidentally, in total 
contradiction to his public statements. 

This Wall Street cabal, with the aid of New Jersey political bosses, 
pushed for Woodrow Wilson to become Governor of New Jersey in 
November, 1910. 

Within a few months, Cleveland Dodge opened a bank account in 
New York and an office at 42 Broadway to boom 


The Jekyl Island Conspiracy 

Wilson into the Presidency. The campaign bank account was opened 
with a check for $1,000 from Cleveland Dodge. Dodge then provided 
funds to mail out the True American of Trenton, New Jersey to 40,000 
subscribers throughout the United States, followed by a regular two 
pages a week of promotional material on Wilson For President. 

Two-thirds of Wilson's campaign funds for the presidency came 
from just seven individuals, all Wall Streeters and linked to the very 
trusts Wilson was publicly denouncing. Wilson's election slogans 
promoted him as a man of peace and against trusts and monopoly. 
These were the very sources financing his campaign: (10) 

Cleveland H. Dodge $51,300 

(Director: National City Bank, etc.); 

Henry Morgenthau (financier) $20,000 

Cyrus PL McCormick (Harvester Trust) $12,500 

Abram I. Elkus (Wall Street lawyer) $12,500 

Frederick C. Penfield $12,000 

(Philadelphia real estate) 

William F. McCombs $11,000 

Charles R. Crane (Crane Co., Chicago) $10,000 

Wilson received the nomination and wrote to "dear Cleve" 
(Dodge) to exult, "I am so happy I can hardly think! " (11) Wilson's 
acceptance speech was written on board the Corona, Dodge's yacht, 
while they planned strategy for the coming campaign. (12) 

In brief, Woodrow Wilson was in the hands of the Money Trust, 
had lied to the American public about his true position on the trusts and 
Wall Street and betrayed the Jef-fersonian-Jacksonian tradition of the 
Democratic Party. 

Wilson was elected President. And the ballots had hardly been 
counted when Wall Street bustled about to arrange "currency reform." 
By early December, 1912, Colonel House had already talked with key 
members of Congress to 


The Federal Reserve Conspiracy 

get them behind Wilson, and when Paul Warburg telephoned House on 
December 12, 1912, the Colonel told him that the plan was ready. 
Added House in his memoirs: "I knew the President-elect thought 
straight concerning the issue. " (13) 

In March, Frank Vanderlip talked with House, and two weeks 
later a group of bankers arrived at the White House with a printed 
"currency reform" bill for Wilson to present to Congress. House 
suggested that it would not be wise to flaunt the power of the House of 
Morgan with a pre-printed reform bill - so the Federal Reserve Act was 
taken back to Wall Street and a typewritten copy made from the printed 
plan. (14) It now only remained to get the Federal Reserve Bill through 


The Jekyl Island Conspiracy 

Endnotes to Chapter Eight 

(1) Frank A. Vanderlip, President, First National City Bank, From 
Farm Boy to Financier (New York: Appleton, 1935), p. 210. 

(2) See Ferdinand Lundberg, America's 60 Families (New York: 
Vanguard Press, 1937). 

(3) Herbert L. Satterlee, J. Pierpont Morgan: An Intimate 
Portrait (New York: Macmillan, 1939), p. 493. 

(4) Ibid., p. 550. 

(5) Frank Vanderlip, op. cit., p. 211. 

(6) Ibid., p. 212. 

(7) John K. Winkler, The First Billion, (New York: Vanguard Press, 
1934), pp. 209-211. 

(8) Frank Vanderlip, op. cit., p. 213. 

(9) Ray Baker, Woodrow Wilson: Life and Letters (New York, 
Doubleday, Page & Co., 1927-39) vol 3, p. 365. 

(10) Louise Overacker, Money in Elections (New York: Macmillan, 

(11) Ray Baker, Ibid. 

(12) op cit. p. 372. 


The Federal Reserve Conspiracy 

(13) Charles Seymour, The Intimate Papers of Colonel House (Boston, 
New York: Houghton Mifflin Co., 1926-28), vol. I, p. 161. 

(14) Seymour, op cit. p. 161. 


Chapter Nine 

Congressional passage of the Federal Reserve Act in 
December, 1913, must count as one of the more disgraceful 
unconstitutional perversions of political power in American 

Certainly it is hard to think of any Act that has had greater 
effect and illegally transferred more monopoly power to a 
conspiratorial clique. These are harsh words. The reader may 
judge if they are accurate after reading this chapter: an almost 
hour by hour detail of the passage of the Act and signature by 
President Wilson. 

The Act transferred control of the monetary supply of the 
United States from Congress to a private elite. Paper fiat currency 
replaced gold and silver. Wall Street financiers were able now to 
tap an unlimited supply of fiat money at no cost. 

Yet, as Senator Townsend stated: "This bill did not originate 
in any party platform. The people have not expressed themselves 
on it anywhere and at any time." (1) An extraordinary lobbying 
effort surrounded the bill just as today in the 1990s an 
extraordinary amount of lobbying is brought forth by any attempt 
to curtail or even investigate the Fed. In 1913 the Democratic 
Party leadership came 


The Federal Reserve Conspiracy 

under strong pressure from Woodrow Wilson and New York banking 
lobbyists to ensure that opposition did not water down the currency bill 
and allow other private interests to become stockholders. 

Witness the complaint of Senator Gilbert Minell Hitchcock, an 
independent-minded gentleman from Nebraska and publisher of the 
Omaha World Herald. The Bill had come to the Senate from the House: 

Mr. HITCHCOCK: "Sacred document" as it came from the House, 

of which, as I have said, we were forbidden to dot an "i" or to 

cross a "t. " 

Mr. OWEN: By whom? 

Mr. HITCHCOCK: And which we were commanded to pass 
without a hearing and without much investigation. 

Mr. POMERENE: Mr. President, I have been around these 
hallowed precincts for some time, and I have not heard that 
anybody has forbidden anybody else to change his views or to 
criticize any bill that came from the House, or any bill that origi- 
nated here. Anyone has a right to change his view. The Senator 
himself has changed his view a number of times. I say that not to 
his discredit, but simply for the purpose of showing that he has 
been a free moral agent all these weeks. 

Mr. HITCHCOCK: Mr. President... 

Mr. OWEN: The Senator from Nebraska did not tell us by whom 
he had been ordered not to dot an "i" nor cross a "t," and I would 
be glad if the Senator would disclose that valuable information, 
unless it is confidential with the Senator. 


_The Money Trust Cons Congress 

Mr. HITCHCOCK: I think I will leave that for the country to 
judge. I will take my chances on it. 

Mr. OWEN: If the Senator is content to leave that as an 
insinuation, it is for the Senator to do so. 

Mr. HITCHCOCK: I will take that liberty. (2) 

On September 18, 1913 the Glass Bill, the house version of the 
Morgan central banking bill, passed the House of Representatives by an 
overwhelming margin of 287 to 85. Most Congressmen had no idea 
what the bill was about. There were no amendments. Members voted 
for or against, and only the brave voted against. This Glass bill was 
named after Congressman Carter Glass of Virginia (1858-1946) - a 
banker (a director of the United Loan and Trust and the Virginia Trust 

The Glass Bill then went to the Senate and became the Owen Bill 
after Senator Robert Latham Owen (1856-1947) of Oklahoma, 
Chairman of the Senate Finance Committee -and a banker (a major 
stockholder in the First National Bank of Muskogee). 

The Senate took exactly 4 1/2 hours to debate and adopt the Owen 
Bill, 43 to 25. The Republicans did not even see the conference report. 
This is normally read to the floor. No member of the Senate could have 
known of its contents and some Senators even stated on the floor of the 
Senate that they had no knowledge of the contents of the Owen Bill. 

At 6:02 p.m. on the same day the Bill was hurried through the 
Senate without discussion. President Woodrow Wilson signed the 
Federal Reserve Act of 1913 into law. 

A detailed review of the Senate debate indicates the Senators had 
no details to discuss and every criticism went unanswered. Republican 
Senator Bristow (1861-1944) made bitter comments on the obvious 
conflict of interest: 


The Federal Reserve Conspiracy 

My allegation is that this bill has been drawn in the interests 
of the banks; that the Senator from Oklahoma, as the chairman of 
the committee, is largely interested in banks; that the profits which 
will accrue to those banks directly will add to his personal 
fortune; that he has voted to increase the dividends on the stock of 
the regional banks, which will be paid to the member banks, from 
5 per cent to 6 per cent; that he has voted against permitting the 
public to hold the stock of these regional banks and has insisted 
that it shall be held by the member banks; and that he has voted 
against giving the Government the control of the regional banks 
and in favor of the banks controlling the regional banks, and it is 
for him to say whether he has violated the rule laid down in 
Jefferson's Manual. (3) 

The Senate debate, for what it was worth without a conference 
report, culminated in a test of political strength on Monday, December 
15, 1913. At this vote the amendments proposed by Senator Hitchcock - 
the only Democrat working against the bill - were tabled by a vote of 40 
to 35. 

Hitchcock's amendments were aimed to make the Federal Reserve 
System a government rather than a private monopoly, i.e., the control of 
the Money Trust would be placed in the Department of the Treasury. 

It is interesting that the Senate would overwhelmingly refuse to 
place control of the money supply within the Treasury and prefer to 
hand it over to the House of Morgan. Colonel House had done his work 

On rereading the lengthy rambling debate, the likelihood of price 
inflation was recognized. The argument was a common sense approach 
that without the discipline of limited gold and silver, the pressure of 
unlimited flat money would lead to price inflation. The only argument 
against was 


The Money Trust Cons Congress 

a rather weak "sound bankers would not allow price inflation." 

Note that we use the term price inflation. In 1913 the term 
inflation always referred to "currency inflation," i.e., expansion of the 
note issue. In the intervening decades the meaning has changed 
entirely. Today when the term inflation is used it always refers to price 
inflation, i.e., an increase in prices. 

The key Senator warning of inflation (currency inflation) ahead 
was Senator Root, who oddly accused Bryan, the pro-silver populist, as 
the dominating influence behind the Federal Reserve Act (most 
unlikely, and a probable red herring). 

However, Root did warn of currency inflation and financial panic 
but then defended the Glass-Owen bill on the grounds that no inflation 
could come about "unless the sound money men who run the banks 
brought it about." 

Once again we have the Money power controlling the opposition, 
i.e., proclaiming arguments that can be easily countered while ensuring 
that the really potent criticisms do not see the light of day. 

Today the irrefutable link between currency inflation and price 
inflation is buried in a confusion of academic double-talk and algebraic 
manipulation. Today's academic economists are so beholden to 
mathematical manipulation (with the deluding plea of rigorousness) that 
they have entirely overlooked fundamental economic truisms. With 
very few exceptions (Hillsdale College, Ludwig von Mises Institute at 
Auburn University), academic economic departments are willing pawns 
of the modern money trust or the Federal Reserve System. (This author 
can speak first hand of the abysmal ignorance of the UCLA Economics 
Department in the early 1960s). 

The reply to Reed came from Senator Hitchcock, who pointed out 
that under the Bill, "the control of the currency 


The Federal Reserve Conspiracy 

system of the country would have to be turned over to the bankers." 
Others like Senator Weeks were unconcerned on the grounds that "the 
United States has the most competent bank men in the world." But then, 
Weeks was a banker himself. 

The last speech on this Monday afternoon came from 
Congressman Mann of Illinois, the Republican floor leader who made 
the rather odd assertion that the U. S. was in the midst of a financial and 
industrial panic which demanded passage of the Federal Reserve Act. 

Tuesday, December 16, 1913 

In Tuesday's Senate debate, Senator Root again emphasized the 
danger of inflation from the proposed Federal Reserve Act. Constant 
interruptions, according to the New York Times (December 17), suggest 
that supporters of the bill were publicly worried. They argued in reply 
that inflation was not possible if the securities issued were good 
government securities - to which Root replied: 

That is neither here nor there so far as my criticism of the 
bill is concerned. My objection is that the bill permits a vast 
inflation of our currency and that inflation can be accomplished 
just as readily and just as certainly by loans of the Government 
paper on good security as upon bad security... 

emphasizing the point that; 

no one denies that in the past from time to time great 
commercial nations have found themselves moving along a tide of 
optimism which, with the facilities of easy money has brought them 
to a point of most injurious and serious collapse. 


The Money Trust Cons Congress 

Root reinforced his "tide of optimism" argument as follows, 

...judgement becomes modified by the optimism of the hour 
and grows less and less effective in checking the expansion of 
business as the period of expansion goes on. 

He clinched the argument: 

...instead of doing our duty as the responsible legislative 
branch of the Government of the United States, we are shirking 
that duty and throwing it upon a subordinate agency of the 

Unfortunately, Root did not push his argument to the limit, i.e., 
that this "subordinate agency of government" as he called it, was in 
effect going to be a private money monopoly of national bankers. 

The general response to warnings of inflation was to cite the 
existence of a gold reserve backing for the money supply: proposed at 
33 1/3 percent. For example, Senator Williams of Mississippi claimed 
that the great inflation feared by Senator Root was only a "bare 
mathematical possibility." Why? Because, argued Senator Williams, 
"no President conceivably would appoint one member of the board who 
believed in fiat money." Eighty years later, Senator Williams to the 
contrary, every single member of the Federal Reserve Board and its 
Regional Banks is an ardent believer in fiat money and an adversary of 
gold! In President Wilson's era it was impossible to conceive that the 
role of gold could ever cease. In President Clinton's era it is impossible 
for policy makers to visualize that gold has any role at all. 

Wednesday, December 17, 1913 

On Wednesday the powerful behind-the-scenes pressure for the 
Federal Reserve Act surfaced when the White House 


The Federal Reserve Conspiracy 

announced that it expected the Senate to pass a currency bill before 
Saturday, that the House would accept this Senate version of the bill 
without changes and the bill would then go to the President for 
signature on Christmas eve. The flaw with this hurry-up scenario was 
that on Wednesday Senator Root's warnings about price inflation had 
some effect and a Democratic Party caucus was called, during the short 
dinner recess in the evening, to consider two of Root's proposals: (a) 
that the note issue should be limited by law and (b) that the gold reserve 
should be increased to 50 percent with a heavy tax on "depletions" 
below this level. 

After discussion the note limitation amendment was rejected, but 
the caucus did adopt a proposal to increase the gold reserve to 40 
percent while requiring that a portion of regional reserve bank earnings 
be set aside as a gold reserve. It is interesting to note that the 
Democratic majority was well aware of the discipline of gold and it was 
not the intent of Congress in 1913 in any way to reject, or even limit 
this discipline. In brief, the present day attempt to demonetize gold by 
phasing it out of the monetary system was not only rejected by the 
Congress of 1913 but the dangers of any such demonetization were 
recognized as ominous for the welfare of the United States. 

Even after the caucus, criticism was to be heard from a few 
Senators. Senator Crawford of South Dakota didn't like the private 
monopoly aspects at all: are simply creating a bank of big bankers, a bank to 
help big banks, but for which you assess the little banks to get the 
capital. The little banks are simply commanded to carry wood and 
water for the big banks. You say to the Vanderlips and the 
Hepburns and the Morgans and the Reynoldses, "come in with 
your short term paper and get the money" but you say to the 
Smiths and 


The Money Trust Cons Congress 

the Browns and the Joneses from the small country districts, "go 
somewhere else with your long term farmers paper; we cannot 
discount it. " 

The intriguing aspect of the Wednesday evening is that while a 
majority of Congress understood more or less the idea that the system 
would be inflationary, they were apparently unwilling to bring 
themselves to vote against the bill. 

Thursday, December 18, 1913 

By Thursday effective opposition had crumbled, and to speed 
passage the Senate operated under a 15-minute rule. By this device half 
a dozen Hitchcock amendments were disposed of and others proposed 
in the previous night's Democratic Party caucus given little attention. 
The debate records serious doubts and differences of opinion coupled 
with predictions that the bill would become law before Christmas and 
signed on Monday or Tuesday of the following week. The opposition 
was sidetracked. Problems were overlooked. Fundamental questions, 
including the possibility of inflation, were bypassed by the leadership. 
One senses almost an air of panic - to pass a "currency bill," at whatever 
cost. Consequently, although the bill was known to be defective, the 
New York Times for Friday, December 19 ran its reporting under the 
head, "Near end of tight on currency bill." The White House 
promptly announced that it was considering names for Governor of the 
Federal Reserve Board. The first name to be floated out of the White 
House was that of James J. Hill of the Great Northern Railroad. It was 
proposed by international banker James Speyer - confirming the behind- 
the-scenes activity of bankers. 


The Federal Reserve Conspiracy 

Friday, December 19, 1913 

On Friday, December 19, the Friday before Christmas when 
Congressional thoughts were more on Christmas trees than money 
trees, the Senate passed President Wilson's currency bill without further 
ado by an overwhelming vote of 54 to 34. Every Democrat in the 
Senate, plus six Republicans and one Progressive Republican, voted for 
the Federal Reserve system. Against the Federal Reserve were 34 
Republicans. As a sop to criticism, the bill included a so-called "radical 
amendment," i.e. that Congressmen could not serve on Federal Reserve 

Bankers, not unexpectedly, were reported to be "relieved" by the 
passage of the bill - but not fully satisfied and still pressed for changes 
in committee. William A. Gaston, President of the National Shawmut 
Bank, spent some days in Washington in conference with members of 
the House and Senate Currency Committees and commented: "...The 
prospective conference changes will make the bill more workable for 
the banks.-" 

Edmund D. Hulbert, Vice President of Merchants Loan and Trust 
Company, added to this: "...on the whole it is a sound bill and will do 
much toward putting banking and currency on a sound footing. " (4) 

W. M. Habliston, Chairman of the First National Bank of 
Richmond, stated, "It will result in an elastic currency which will avert 
panics," and Oliver J. Sands, President of the American National Bank, 
commented that 

The passage of the currency measure will have a beneficial 
effect upon the country at large and its operation will help 
business. It seems to me the beginning of an era of general 

The only reported objection from bankers came from Charles 
McKnight, President of National Bank for Western Pennsylvania: "It 
will do the country no good...." 


The Money Trust Cons Congress 

Saturday, December 20, 1913 

After passage of the Owen bill in the Senate the measure was sent 
to a joint House-Senate conference to iron out the major differences 
between the Glass bill from the House and the Owen bill from the 
Senate. This conference excluded all Republican members. The 
conference then met for four hours on Saturday evening, December 20, 
at which time at least 20 (some say 40) major points of difference in the 
two versions were uncovered, in addition to minor disagreements in 
language requiring over 100 corrections. In most of these minor items 
the Senate yielded to the House. However, none of the 20 (40) major 
differences were discussed in this Saturday evening conference, and it 
was generally agreed that Monday passage of the joint bill was 
extremely unlikely. As reported by the New York Times (December 21, 
1913), "The points seriously at issue embody practically all the 
substantial Senate amendments." 

In an effort to work out some of the major differences, the 
conferees agreed to meet all day Sunday. Further, on this Saturday the 
full House met and refused to accept the Senate version of the bill by a 
vote of 294 to 59 and then proceeded to pass amendments binding on 
the House conferees. 

By Saturday evening, December 20, 1913, the following were 
some of the principal major points of dispute between the House and 
the Senate and reflected significant, fundamental differences in the 
approach to a currency bill: 

First - the number of regional reserve banks, 

Second - the question of guarantee of deposits, 

Third - the amount of gold reserve to be required against the 
circulating notes, 

Fourth - the changes with respect to domestic acceptance in the 
case of domestic and foreign trade, 

Fifth - the changes in the reserve provisions, 


The Federal Reserve Conspiracy_ 

Sixth - the right of member banks to use the notes of the Federal 
reserve banks for reserve purposes, 

Seventh - the status of the two percent Government bonds used as 
security for national bank notes, 

Eighth - the Senate's provision with respect to an increase in 
national bank circulation. 

This was the legislative position late Saturday night. 

Sunday, December 21, 1913 

Quite what happened on this Sunday in Washington, D.C. we 
shall never know for sure. 

What we do know is that on Sunday morning the Senate-House 
conferees were faced with more than 20 (some say 40) fundamental 
differences on a critically important bill - a bill to affect the lives of 
every American then and in the future. Yet, the following Monday 
morning the New York Times (December 22) reported on the front page, 
"Money Bill may be law today." The Times reported that in some 
undisclosed way the House-Senate conferees had adjusted their 
differences. The "newspaper of record" put it this way: 

With almost unprecedented speed, the conference to adjust 
House and Senate differences on the currency bill practically 
completed its labors early this morning (Monday 22nd). On 
Saturday the conferees did little more than dispose of the 
preliminaries, leaving forty essential differences to be thrashed out 
The "almost unprecedented" speed in the conference probably 

occurred at a most unlikely time - between 1:30 a.m. and 4 a.m. 

Monday, December 22. Let's look at that critical Monday in more 



The Money Trust Cons Congress 

Monday, December 22, 1913 

At midnight Sunday, December 21, either 20 or 40 
(depending on the source) major points of disagreement required 
resolution. At 11 p.m. Monday, 23 hours later, the House voted 
298 to 60 and passed the Federal Reserve Act. During this brief 
23 hours the major differences were reconciled, worded, sent to 
the printer, set up in type, proofread, printed, distributed, read by 
every member of the House, discussed, pondered, weighed, 
deliberated, debated -and voted upon. This miracle of speediness, 
never equaled before or after in the U.S. Congress, is ominously 
comparable to the rubber stamp lawmaking of the banana 

Mon. Dec. 22, 1913 

1:30a.m. - 

■ 4:30a.m. 

House-Senate con 
ferees adjust 20 
(40) major differ- 
ences in the two 

4:30 a.m 

Report handed to 

12 1/2 hours from 
conference to 
printed report 

7:00 a.m 

Proofs read 

1:00 p.m. 

Printed copies 
delivered from 

2:00 p.m 

Printed report on 
Senate desks with 
notification of a 
meeting at 4 p.m. 


The Federal Reserve Conspiracy 

4:00 p.m. 

Republican members 
of conference go to 
Conference room -to 
be told that a bill had 
already been 

5 hours from printed 
final report to House 

6:00 p.m. 

Printed conference 
report submitted to the 
House by 

Congressman Glass - 
most House members 
go to the restaurant for 
dinner while the bill is 
read (1 1/2 hours). 

7:30 p.m 

Debate begins with a 
20 minute speech by 

11:00 p.m. 

The House votes 298 
to 60 in favor of the 
Federal Reserve Act. 

The manner in which the Federal Reserve bill was handled by the 
Democratic majority and specifically by banker-politician Senator 
Owen and banker-politician Carter Glass is reflected in a complaint on 
the Senate floor 


The Money Trust Cons Congress 

by Senator Bristow of Kansas, the Republican leader, in which he 
explains why he would not sign the conference report: 

Mr. LA FOLLETTE: Would it disturb the Senator to inform 
us who did participate in this conference and whether any Senator 
declined to participate? 

Mr. BRISTOW: As to those who participated in the 
conference I am not advised. I was a member of the committee of 
conference appointed by the President of the Senate, but I had no 
knowledge as to the meeting of the conferees until after the report 
as it is before us had been made, printed, and placed upon the 
desks of Senators. I was then notified by the chairman of the 
committee that there would be a meeting of the committee of 
conference at 4 o'clock, two hours after this report of the 
committee of conference of the two Houses of Congress on the bill 
(H.R. 7837) to provide for the establishment of Federal reserve 
banks, for furnishing an elastic currency, affording means of 
rediscounting commercial paper, and to establish a more effective 
supervision of banking in the United States, and for other 
purposes, had been placed upon my desk. I, in company with the 
Senator from Minnesota (Mr. Nelson), visited the room where we 
were invited to appear. We found the chairman of the committee 
and the Democratic members of the committee of conference there, 
and were given to understand that they had perfected the 
conference report. We were then invited to express our opinion of 
it, but I preferred to express my opinion where it might appear in 
the Record, rather than in the 


The Federal Reserve Conspiracy 

privacy of the committee room, and that I shall undertake to do 
this morning. 

I see this report is signed by the Democratic members of the 
committee. Of course, I did not sign it because I was not invited to 
sign it, and I should not have done so, anyway, for I did not know 
at the time the report was prepared what it contained, and I had 
no opportunity of ascertaining what it contained.^ 

In brief, the Republican leader did not know what was in the Act 
nor was he given the opportunity to find out what was in the Act. Later 
in debate Bristow directly accused Owen of inserting provisions for the 
profit of his own bank. 

There were major abuses of the legislative process in the passage 
of the Federal Reserve Act - sufficient to void the act. If we have a 
society that lives by rules then there is no Federal Reserve Act. 

Both Finance Committee Chairmen, Congressman Glass and 
Senator Owen, had conflict of interest with personal banking interests 
and stood to gain from the bill. Meetings to discuss the bill were held 
without knowledge of committee members. Decisions were arrived at 
and established without the knowledge and agreement of members. 
Major sections of the bill were settled without consultation and 
railroaded into final form. There is indisputable evidence of outside 
banking influence upon Congress. 

The Federal Reserve Act is, even from our superficial 
investigation, suspect legislation. Most of Congress had no idea of the 
contents of the final bill and certainly none had the opportunity to 
reflect and consult with the broad base of the electorate. A private 
money monopoly was granted to a few national bankers under suspect 


The Money Trust Cons Congress 

As Congressman Lindbergh stated on December 23, 1913: 

This Act established the most gigantic trust on earth. When 
the President signs this bill, the invisible government by the 
Monetary Power will be legalized. The people may not know it 
immediately but the day of reckoning is only a few years 


The Federal Reserve Conspiracy 


George Perkins 



The Money Trust Cons Congress 

Endnotes to Chapter Nine: 

(1) Congressional Record: Senate, February 8, 1915. 

(2) op. cit. 

(3) op. cit. 

(4) New York Times, December 20, 1913. 

(5) Congressional Record: Senate, December 23, 1913, p. 1468. 


The Federal Reserve Conspiracy 

Paul Volcker, employee of Chase Manhattan Bank and 
Chairman of the Federal Reserve System in the 1970s. 


Chapter Ten: 

Today in the 1990s the Federal Reserve quietly, and 
protected from any public examination or accounting, continues 
its never challenged monopoly of the money supply. 

Its twofold function is: (a) to regulate the flow of credit and 
money for specific economic objectives, and (b) to supervise 
commercial banks, i.e., mostly itself. 

The central policymaking body of the FRS is the Board of 
Governors appointed by the President and confirmed by the 
Senate. Each of the 12 regional banks has its own directors. These 
are divided into three classes. Class A directors represent the 
banking system, Class B directors represent industry and Class C, 
the public, supposedly. 

In fact, Class C directors have never represented the public. 
It is not at all unusual for a banker to serve a term as a Class A 
director then go on and serve another term as a Class C director. 

The Federal Reserve is a private system owned by the banks 
(see figure below). Fed control over money is a private monopoly 
granted by Congress. 

It's so powerful that no Congressman dare ask simple 


The Federal Reserve Conspiracy 

Of course, there is good reason why the Fed doesn't want citizens 
poking around asking questions. It is a moneymaking machine literally 
— and this is freely admitted by the U. S. Government. Here is an 
official statement: 

Where does the Federal Reserve get the money with which 
to create bank reserves'? 

It doesn't "get" the money, it creates it. When the 
Federal Reserve writes a check it is creating money. This can 
result in an increase in bank reserves - a demand deposit or in 
cash. If the customer prefers cash he can demand Federal Reserve 
Notes and the Federal Reserve will have the Treasury Department 
print them. The Federal Reserve is a total moneymaking machine. 
It can issue money or checks. And it never has a problem in 
making its checks good because it can obtain $5 and $10 bills 
necessary to cover its checks simply by asking the Treasury 
Department to print them. (Source: Money Facts, published by the 
Committee on Banking and Currency, 1964, U. S. Congress.) 

Back in 1913 when the Federal Reserve Act was passed, the idea 
of a Federal Reserve System - in effect a central bank - was promoted to 
the American people by both bankers and President Woodrow Wilson 
as an institution outside the control and influence of bankers - on the 
grounds that monetary policy was too important to be left in the hands 
of private interests. However, in fact, the institution is completely 
dominated, and always has been, by major New York bankers. 

The Fed lied! 

The very first meeting of the Federal Reserve Bank of New York 
on October 5, 1914, was held in the offices of the Bank of Manhattan, 
40 Wall Street, New York. Bank of 


The Federal Reserve Today 

Manhattan later merged with Chase National to become Chase 
Manhattan Bank. 

Skipping intervening history for lack of space, we also find that in 
the mid-1970s, the leading Class A director of the New York Fed was 
none other than Chairman of the Trilateral Commission - David 
Rockefeller. David's term expired in 1976 and he was replaced by the 
chairman of Morgan Guaranty Trust. However, David's influence was 
perpetuated in two ways: by appointment of Trilateral Paul Volcker as 
president of the New York Federal Reserve Bank, a permanent position 
not subject to the necessity of re-election at periodic intervals and 
appointment of G. William Miller (member of the Chase Advisory 
Board) as Chairman of the Federal Reserve System, replacing 
Trilateralist Arthur Burns. 

Moreover, others (of the nine) Federal Reserve Bank of New York 
directors had links to Chase Manhattan Bank. For example, the three 
Class B directors were Maurice F. Granville, Chairman of the board of 
Texaco; William S. Sneath, Chairman of the Board of Union Carbide; 
and John R. Mulhearn, President of New York Telephone. 

Let's look briefly at the career of Paul Volcker, former president of 
the New York Federal Reserve Bank. In 30 years, Volcker has divided 
his time almost equally between the Federal Reserve Bank, Chase 
Manhattan Bank and sub-cabinet positions in Washington, D.C. - a 
perfect example of the so-called "revolving door" and the Trilateral 
objective of "blurring the distinctions between public and private 
institutions" for Trilateral advantage. 

Paul Volcker was born in 1927 in New Jersey. His first degree is 
from Princeton, his M. A. from Harvard and his post-graduate work 
from the London School of Economics -that well known home of 
British socialism. In 1952, straight from the London School of 
Economics, Volcker joined the Federal Reserve Bank of New York as 
an economist. He stayed for five years, until 1957, at which time 
Volcker moved 


The Federal Reserve Conspiracy 

from Liberty Street to become an economist for Chase Manhattan Bank, 
where he stayed for four years, until 1961. In 1961, Volcker went to the 
Treasury Department in Washington, thus completing the first round of 
his three stop "revolving door." Appointed as Deputy Undersecretary 
for Monetary Affairs, he held that job just long enough to learn the 
ropes in Washington, and returned to New York, to Chase Manhattan 
Bank, as Vice President in charge of Planning. After three years in that 
post, Volcker left in 1969 to become Undersecretary for Monetary 
Affairs at the U. S. Treasury Department. After five years, Volcker 
completed the second round of his "revolving door" with an 
appointment as President of the Federal Reserve Bank of New York. 

Volcker is also a member of the Council on Foreign Relations, the 
Rockefeller Foundation and the American Friends of the London 
School of Economics. 

If Paul Volcker was a solitary phenomenon, we could make no 
case for Trilateral control of the Federal Reserve System. In fact, the 
Volcker phenomenon is one of a dozen parallel situations. 

The Revolving Door Career of Trilateral Paul 

1952-57 Economist, Federal Reserve Bank of New York 1957- 
61 Economist, Chase Manhattan Bank 1962-63 U.S. Treasury 
1963-65 Deputy Undersecretary for Monetary Affairs, 

U.S. Treasury 1965-68 Vice President for Planning, 
Chase Manhattan 

Bank 1969-74 Undersecretary for Monetary Affairs, 
U.S. Treasury 1975 President, Federal 
Reserve Bank of New York 


The Federal Reserve Today 

The Federal Reserve Board itself is appointed by the President. 

The original Federal Reserve Board represented those very 
interests that Woodrow Wilson assured the American public would not 
be represented in the Federal Reserve System. The Chairman of the 
Board was William G. M'Adoo, a prominent Wall Street figure, former 
Secretary of the Treasury - and Woodrow Wilson's son-in-law. A key 
appointment was Paul M. Warburg, the German banker brains behind 
the Federal Reserve System. The Warburg family controlled the 
Manhattan Bank. Also on the Board was Charles S. Hamlin, of the 
Carnegie Endowment for International Peace. Another member of the 
original board was banker W. P. G. Harding. Franklin D. Roosevelt's 
uncle, Frederic A. Delano, was Vice Governor of the board - very 
appropriate because the "liberal" Roosevelts came from an old-time 
New York banking family. John Skelton Williams, President of the 
Richmond Trust Company was another member. Thus, the initial 
makeup of the original Board of Governors reflected the elite and the 
banking interests and from that time on the Federal Reserve System has 
continued to reflect those interests. 

Trilateral Arthur M. Burns was Chairman of the Board from 1970 
to 1978, a dominant voice who pretty much dictated Federal Reserve 
policy. According to Board member and Trilateral Andrew Brimmer, 
"Arthur Burns has had a direct hand in selecting every board member. " 

Trilateral dominance of the domestic monetary system suggests 
we examine Trilateral world order objectives for a possible linkage. 

Trilateral policy makers and analysts fully realize that the world 
monetary system, with created money as reserve assets, is in a state of 
collapse. The Triangle Papers dealt with the world monetary systems 
(Towards a Renovated World Monetary System), and was authored by 
Richard N. Cooper 


The Federal Reserve Conspiracy 

(later Undersecretary of State for Economic Affairs). Motoo Kaji, 
Professor of Economics at Tokyo University (author of a book in 
Japanese, Gendai No Kokusai Kinyu - Contemporary International 
Monetary Affairs) and Claudio Segre, a French banker with Compagnie 
Europeenne de Placements. 

Triangle Paper No. 1 identified two world problems: (a), how to 
achieve full employment without "rapid" inflation, and (b), how to 
combine "managed" national economies into a "mutually beneficial 
world economy." 

It is vital to hold Trilateralist assumptions in mind. Trilateralists 
are not looking for a solution to the world monetary problems: 
Trilateralists are looking for a "solution" consistent with, and which 
will promote, their own objectives. These objectives are: (a), a managed 
economy, i.e., managed by Trilaterals; and (b), a "new world order" of 
these managed economies. 

Once again we find manipulation of a problem to achieve 
Trilateral objectives. Almost on a daily basis we find reflections of the 
struggle to keep a hold on the U.S. monetary system in order to achieve 
a world federal reserve system. 

Fed Monetizes Foreign Debt 

In the early 1980s the Fed, through Paul Volcker, conned 
Congress into another vast expansion of monetary credit through 
monetization of foreign debt instruments. 

The so-called Depository Institutions Deregulation and Monetary 
Control Act of 1980 is a total misnomer. In practice it brings all banks 
under Fed control whether they like it or not and gives the Fed power to 
vastly increase fiat money by monetizing foreign debt, much of it 
worthless (see attached reproduction from the Bill). 

Once again the Fed did everything possible to avoid publicity. 
Only one Congressman, Dr. Ron Paul, spotted the clause to monetize 
foreign debt. To avoid any publicity, the 


The Federal Reserve Today 

Chairman of the Banking Committee quickly agreed to Paul's request to 
remove the clause: "You want it removed? We'll take it out." 

Then we get a repeat of the unconstitutional conduct surrounding 
the 1913 FRS Act. The House voted for the Bill without the clause - but 
in Conference Committee it was quietly re-inserted and became part of 
the Act as finally approved by both Houses. We doubt any 
Congressman knew what was included in the bill as finally passed - 
that's the influence of the Fed today. 

Quietly, without fanfare - and with the vast bulk of citizens 
unaware - the world bankers have been building an international money 
machine: an international Federal Reserve System with power to 
control the world's financial and economic system. 

The elements of this global money machine can be traced back to 
the League of Nations and the Bank of International Settlements in the 
1920s. After World War Two the International Money Fund and the 
World Bank were instituted to globalize credit and loans. 

Then in the late 1950s came the Eurodollar market, now a vast 
international market dealing in deposits and credits denominated in 
dollars outside the United States. The Eurodollar system may in the 
light of history come to be seen as a first step in a global dollar system. 
Eurodollars are dealt in by banks not resident in the U.S. and by 
institutions not subject to U.S. banking regulations and restrictions. 

Paul A. Volcker, former Fed Chairman, has made the role of 
appointments to the Federal Reserve Board clear, - to support the 
Chairman's policy. 

In reference to Clinton appointment Alan Blinder, Volcker 

I think a vice chairman has a responsibility for supporting 
policy in public statements. If he has 


The Federal Reserve Conspiracy 

any real difference of opinion at the end of the day that shouldn 't 
be disguised but as much as possible he should support the 

In brief, the policy created by New York bankers should prevail, 
whatever the personal opinions of the Vice Chairman of the Board or 
any lesser Director. Which is about as close to a closed shop monopoly 
as one can get. 

In replying to criticism that he spoke out too much, Alan Blinder 
made a revealing comment: "When we take actions, they are not 
reversible by any other body of government..." New York Times, 
September 26, 1994. 

So here we have it. The Federal Reserve is a private monopoly of 
money credit created by Congress under highly questionable 
circumstances which is beholden to the Chairman of the Board and 
whose decisions cannot be changed by Government or anyone else. 

A free society under the rule of law? The United States has quietly 
become a hostage to a handful of international bankers. And just dare 
any Congressman challenge Fed authority! 


The Federal Reserve Today 

Federal Reserve Bank of San Francisco Claims "Some people 
think we're a branch of the Government We're not 
We're the banks' Bank. " 

This confirms our discussion in this book. 

July 16,1979- 



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